Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Question
Chapter 7, Problem 11E
To determine
To find:The low cost combination of workers.
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Lobo Lighting Corporation currently employs 100 unskilled laborers, 80 factory technicians, 30 skilled machinists, and 40 skilled electricians. Lobo feels that the marginal product of the last unskilled laborer is 400 lights per week, the marginal product of the last factory technician is 450 lights per week, the marginal product of the last skilled machinist is 550 lights per week, and the marginal product of the last skilled electrician is 600 lights per week. Unskilled laborers earn $400 per week, factory technicians earn $500 per week, machinists earn $700 per week, and electricians earn $750 per week.
Is Lobo using the lowest cost combination of workers to produce its targeted output? If not, what recommendations can you make to assist the company?
Flat Screen Televisions Lose $126 per Unit Sold: Sony CorporationMost of the cost of a flat screen TV involves the LCD panel. Globally, 220 million flat screen TVs were sold in 2011 for $115 billion. Although scale economies in massive factories and volume discounts on electronic input components have driven the cost of LCDs down from $2,400 to $500 the last decade, the price has fallen even faster. In 2001, the average selling price of a large LCD panel was over $4,000. By 2011, this price had fallen below $600. Sony Corporation finds its flat screen TVs now fail to cover the full cost of the LCD panels and instead impose a $126 ($500 - $374) loss per TV sold. Nevertheless, the indirect fixed costs of the LCD factories including Korean Samsung, Japanese Sharp, Panasonic, and Sony constructed are partially covered by continuing its operation (continue production). Losses would be greater in the short run if they shut down.As an economic consultant, what would you advise Sony…
Whoville Marble Works (WMW) produces Bespoke Marble Kits (BMKs) for discerning
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and their production function is given by q = 2070-410.250.35, where
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Chapter 7 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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