Managerial Economics

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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 -

    Hiring a printer for $20 means getting 20 more books, or $1 per book. Adding a press for $5000 means getting 1000 books or $5 per book. Hmmmmm, What do you think the publisher should do??

  • Managerial Economics -

    should use more printers and fewer presses because printers cost less than presses.

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