The wage rate of Zeta Corp. employees is 20 million per month, while the cost of one unit of machine is million per month. Currently, Zeta Corp. produces 10 units of output and employs 20 employees and use units of production machines. This combination of factors of production is the most efficient for the company. So If Zeta Corp. wants to increase its output to 200 units but it cannot change its number of machines (from 5 units), what is the optimal number of employees and production costs of Zeta Corp.?
The wage rate of Zeta Corp. employees is 20 million per month, while the cost of one unit of machine is million per month. Currently, Zeta Corp. produces 10 units of output and employs 20 employees and use units of production machines. This combination of factors of production is the most efficient for the company. So If Zeta Corp. wants to increase its output to 200 units but it cannot change its number of machines (from 5 units), what is the optimal number of employees and production costs of Zeta Corp.?
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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