Assume that the sale price of chairs is always sufficiently high that it is profitable to fulfill this 80-chair order. The firm needs to make 80 chairs to fulfill its order. Assume also that the firm is profit maximizing (& therefore cost minimizing). What combinations of robot and worker hours must they use to minimize costs? Show your work. Use the equation that must be true for cost minimization Suppose that there is a firm that produces chairs and the firm receives an order for 80 chairs. Thefirm has two resources available to it. The first is a (human) worker, who must be paid $18 foreach hour they spend producing chairs. The second is a robot, that costs $15 of inputs (includingelectricity and maintenance) for each hour it works. Chairs produced by either method areidentical and of equivalent quality.Assume that the use of these two inputs is completely independent. This means that the numberof hours of robot-work does not affect the productivity of the worker, and vice versa.The production of chairs based upon the numbers of hours of each of the inputs used is givenbelow. For example, 2 hours of robot time will produce 10 chairs. 7 hours of worker time willproduce 54 chairs.RobotHours01234567891011121314RobotProduction0510152025303540455055606570RobotHours01234567891011121314WorkerProduction0152533404550545758596061।6263

The cost of producing an additional unit of goods is called Marginal cost. (MC). The marginal…

Assume that the sale price of chairs is always sufficiently high that it is profitable to fulfill this 80-chair order. The firm needs to make 80 chairs to fulfill its order. Assume also that the firm is profit maximizing (& therefore cost minimizing). What combinations of robot and worker hours must they use to minimize costs? Show your work. Use the equation that must be true for cost minimization

Assume that the sale price of chairs is always sufficiently high that it is profitable to fulfill this 80-chair order. The firm needs to make 80 chairs to fulfill its order. Assume also that the firm is profit maximizing (& therefore cost minimizing). What combinations of robot and worker hours must they use to minimize costs? Show your work. Use the equation that must be true for cost minimization

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter9: Applications Of Cost Theory

Section: Chapter Questions

Problem 2.1CE

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