Let the cost of a pre-stamped envelope be w1, and the cost of printing one sheet of paper with marketing material be w2. Also, suppose that the firm already printed 85 sheets of paper with marketing material. In the short run, at most the firm would be able to produce O 9 marketing mailers. To produce this number of mailers, the firm would need to purchase 8 267 pre-stamped envelopes.
Let the cost of a pre-stamped envelope be w1, and the cost of printing one sheet of paper with marketing material be w2. Also, suppose that the firm already printed 85 sheets of paper with marketing material. In the short run, at most the firm would be able to produce O 9 marketing mailers. To produce this number of mailers, the firm would need to purchase 8 267 pre-stamped envelopes.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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
Transcribed Image Text:Let the cost of a pre-stamped envelope be w1, and the cost of printing one
sheet of paper with marketing material be w2. Also, suppose that the firm
already printed 85 sheets of paper with marketing material. In the short
run, at most the firm would be able to produce O 9
marketing mailers. To produce this number of mailers, the firm would
need to purchase 8 267
pre-stamped envelopes.

Transcribed Image Text:Amail-marketing company combines twpe
destion(4 po
erPenemped envelopes (input 1)
and printed marketing campaign material (input 2). Every envelope can be stuffed
with five pieces of paper. That is, the number of marketing mailers is determined by
the following production function:
y = min{x1,},
where y stands for the number of mailers, x1 stands for the number of pre-stamped
envelopes, and x2 stands for the number of sheets of paper.
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