A bakery is located just up the road from Jane’s home. On Saturday mornings, she, like many others, buys her bread there. Saturday morning, predictably, is the busiest time of the week for the store, which necessitates the hiring of additional employees.On weekdays, only one assistant provides services to the customers. But because of the busy scheduling on Saturdays, five assistants are brought in to assist. The problem is the additional five are not able to serve five times as many customers. Labour is faced with diminishing return and some factors of production in the bakery shop are fixed.The shop size is fixed. Saturday mornings at the shop is terrible for customers because of overcrowding. Assistants sometimes had to wait while customers squeezed past each other to get to the counter. The five assistants get in each other’s way as they try hard to reduce the pressure and run smooth services.The pay point is only one. Ordered delivery also wastesThe bread is very nice, and customers are always willing to go buy the bread. But the conditions on Saturdays makes some customers going for alternatives. Jane goes there on Saturday, amidst the frustrations, the muttering to get her bread. She always lives the placed upset for her favoritebread. Jane has been complaining to the baker to do something about it. She has also commented on the problem to you as her friend.And another problem: The baker has telling her faithful customers of raising the price of bread from GHS 6 to GHS 8, something Jane is not so happy about. As an economist and a friend to Jane, what advice will you give to the baker
A bakery is located just up the road from Jane’s home. On Saturday mornings, she, like many others, buys her bread there. Saturday morning, predictably, is the busiest time of the week for the store, which necessitates the hiring of additional employees.On weekdays, only one assistant provides services to the customers. But because of the busy scheduling on Saturdays, five assistants are brought in to assist. The problem is the additional five are not able to serve five times as many customers. Labour is faced with diminishing return and some factors of production in the bakery shop are fixed.The shop size is fixed. Saturday mornings at the shop is terrible for customers because of overcrowding. Assistants sometimes had to wait while customers squeezed past each other to get to the counter. The five assistants get in each other’s way as they try hard to reduce the pressure and run smooth services.The pay point is only one. Ordered delivery also wastesThe bread is very nice, and customers are always willing to go buy the bread. But the conditions on Saturdays makes some customers going for alternatives. Jane goes there on Saturday, amidst the frustrations, the muttering to get her bread. She always lives the placed upset for her favoritebread. Jane has been complaining to the baker to do something about it. She has also commented on the problem to you as her friend.And another problem: The baker has telling her faithful customers of raising the price of bread from GHS 6 to GHS 8, something Jane is not so happy about. As an economist and a friend to Jane, what advice will you give to the baker?
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