. The Largo Publishing house uses 400 printers and 200 printing presses to produce books. A printer’s wage rate is $20, and the price of a printing press is $5, 000. The last printer added 20 books to total output, while the last press added 1,000 books to total output. Is the publishing house making the optimal input choice? Why or why not? If not, how should the manager of Largo Publishing House adjust input usage?
Managerial Economics - economyst, Tuesday, August 18, 2009 at 12:44pm
The publisher paid $20 to a printer and got 20 books, or a $1 per book. He paid $5000 for a press and got 1000 books, or $5 per book. Sounds like he should get more printers and less presses.