You are given the following information about the amount your company can produce per day given the number of workers it hires.
Numbers of Workers Quantity Produced
a. What is the range of workers where there are increasing returns to scale? Constant returns to scale? Decreasing returns to scale? Negative returns?
b. If the company wants to maximize total output, what number of workers should be hired?
c. What is the number of workers that should be hired if the company wants to maximize output per worker?
Increasing return to scale occurs in the range of 1 to 6 workers.
We can determine this by finding the number items each worker produces. ...
This solution provides a maximizing total output vs output per worker with returns to scale analysis.