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    Managerial Decision Based on Marginal Benefit

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    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 five workers, and productivity also increased by 50,000 pages per day. Copiers cost about twice as much as workers. Would you recommend they buy another copier or hire another worker?

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    Solution Preview

    The marginal benefit of workers, i.e. the increased production resulting from adding one more worker, is 10,000 pages per day. The ...

    Solution Summary

    This solution shows how to use marginal analysis to decide whether a printing company should hire more workers or buy more copiers.