An appliance manufacturing business requires both machines and labor to produce finished products. The following graph shows the isoquant map for this business. Assume the business currently produces 300 appliances per time period using 27 workers and 27 machines.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 27RQ: What is the difference between economies of scale, constant returns to scale, and diseconomies of...
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Economics

Figure 7-4
An appliance manufacturing business requires both machines and labor to produce finished products. The following
graph shows the isoquant map for this business. Assume the business currently produces 300 appliances per time period
using 27 workers and 27 machines.
Machines
31-
27+
20-
10
Point A
Point C
Point B
10
Point D
20
B
STO
q=100
27 31
Workers
Refer to Figure 7-4. Which point on the graph represents the business's current combination of capital and labor?
q = 400
q=300
q=200
Transcribed Image Text:Figure 7-4 An appliance manufacturing business requires both machines and labor to produce finished products. The following graph shows the isoquant map for this business. Assume the business currently produces 300 appliances per time period using 27 workers and 27 machines. Machines 31- 27+ 20- 10 Point A Point C Point B 10 Point D 20 B STO q=100 27 31 Workers Refer to Figure 7-4. Which point on the graph represents the business's current combination of capital and labor? q = 400 q=300 q=200
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