D and E ### Scenario Analysis: Car Dealership Efficiency Wages**Context:**A car dealership is evaluating whether increasing wages can improve salespeople's productivity. Initially, each salesperson sells two cars per day, earning $26 per hour for an 8-hour day.#### Instructions**Note:** Enter your answers as whole numbers.#### Question A:- **What is the current labor cost per car sold?**Calculate the current daily income (8 hours x $26/hour) and divide by the average number of cars sold (2).**Answer Box:** $ ___#### Question B:- **Suppose that when labor wages increase to $36 per hour, the average number of cars sold increases to 4 per day. What is the new labor cost per car sold?**Calculate the daily income (8 hours x $36/hour) and divide by the new average car sales (4).**Answer Box:** $ ___- **By how much is it higher or lower than it was before?**Select whether it's higher or lower and input the difference.**(Click to select)** by $ ___- **Has the firm's labor expenditure efficiency (cars sold per dollar of wages) increased or decreased?****(Click to select)**#### Question C:- **If the wage increases again to $49 per hour, and cars sold rise to an average of 5 per day, what is the labor cost per car sold?**Calculate the new daily income (8 hours x $49/hour) and divide by 5.**Answer Box:** $ ___#### Question D:- **For efficiency maximization in labor expenditure, which salary should the firm use: $26/hour, $36/hour, or $49/hour?**Calculate cars sold per dollar of wages to determine the optimal rate.**Answer Box:** $ ___#### Question E:- **Which salary maximizes worker productivity in terms of cars sold per worker per day?**Identify which scenario yields the highest car sales per day.**Answer Box:** $ ___This exercise encourages analysis on optimizing wages for productivity and efficiency in sales.

The labor(L) cost(C) refers to the salary paid by the employer to its worker(L). The labor(L)…

d. If the firm's goal is to maximize the efficiency of its labor expenditures, which of the three hourly salary rates should it use: $26 per hour, $36 per hour, or $49 per hour? 2$ e. By contrast, which salary maximizes the productivity of the car dealer's workers (cars sold per worker per day)? 2$

d. If the firm's goal is to maximize the efficiency of its labor expenditures, which of the three hourly salary rates should it use: $26 per hour, $36 per hour, or $49 per hour? 2$ e. By contrast, which salary maximizes the productivity of the car dealer's workers (cars sold per worker per day)? 2$

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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image 1 : the following average-total-cost schedule: Quantity Average Total Cost (Number of players) (Dollars) 600 300 601 301 Your current level of production is 600 devices, all of which have been sold. Someone calls, desperate to buy one of your music players. The caller offers you $550 for it. You ( should , or should not ) ? accept the offer. image 2 : Quantity Total Cost Variable Cost (Dozens of pizzas) (Dollars) (Dollars) 0 280 0 1 320 40 2 350 70 3 380 100 4 420 140 5 470 190 6 530 250 The pizzeria's fixed cost is ? .
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