C A copy company wants to expand production It currently has

C. A copy company wants to expand production. It currently has 20 workers who share eight copiers. Two months ago, the firm added two copiers and output increased by 100,000 pages per day. One month ago, they added 5 workers and productivity also increased by 50,000 pages per day. Copiers cost about twice as much as workers. Q10. What is the output of pages per worker? Q11. What is the output of pages per copier machine? Q12. Would you recommend they hire another employee or buy another copier? Q13. You have to justify your answer in for the previous question.

Solution

Actually, a Marginal Productivity of Labor (MPL) Vs. Marginal Productivity of Capital Question (MPC).

Figure out MPL vs MPC. Whichever one is higher has greater marginal productivity, meaning more bang for buck.

since copiers = 2 x workers,
let the the price of a copier = $2 and the price of a worker $1. I made these values up. You can use any set of unit $ values for both as long as price of copiers is 2x price of workers

MPL in this case = 50,000 add\'l pages / 5 workers
= 10,000 pages per worker
= 10,000 pages per $1 spent

MPC = 100,000 add\'l pages / 2 copiers
= 50,000 pages per copier
= 50,000 pages per $2 spent
= 25,000 pages per $1 spent