HARRY: We should examine whether our company’s productivity—gallons of potion per worker—would rise or fall. RON: We should examine whether our average cost—cost per worker—would rise or fall. HERMIONE: We should examine whether the extra revenue from selling the additional potion would be greater or smaller than the extra costs. Who do you think is right? Why?
HARRY: We should examine whether our company’s productivity—gallons of potion per worker—would rise or fall. RON: We should examine whether our average cost—cost per worker—would rise or fall. HERMIONE: We should examine whether the extra revenue from selling the additional potion would be greater or smaller than the extra costs. Who do you think is right? Why?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
- Three managers of the Magic Potion Company are discussing a possible increase in production. Each suggests a way to make this decision.
HARRY: We should examine whether our company’s productivity—gallons of potion per worker—would rise or fall.
RON: We should examine whether our average cost—cost per worker—would rise or fall.
HERMIONE: We should examine whether the extra revenue from selling the additional potion would be greater or smaller than the extra costs. Who do you think is right? Why?
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