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 1000 books to total output.
Is the publishing house making the optimal input choice? Why...
If not, how should the manager of Largo Publishing House adjust input usage?
The last printer adds 20 books to the total output. So, the marginal productivity of the last printer is 20 books. The marginal productivity of the last printing press is 1000 books. The optimal choice of input is determined by the condition,
(Marginal productivity of ...
The solution discusses about the optimal production scenario.