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You were recently hired to replace the manager of the Roller Division at a major conveyor manufacturing company. Roller Manufacturing company is relatively simple, requiring only labor and a machine that cuts and crimps rollers. As you review the production information, you learn that labor is paid $8 per hour and the last worker hired produced 100 rollers per hour. The company rents roller cutters and crimping machines for $16 per hour, and the marginal product of capital is 100 rollers per hour. What do you think the previous manager should have done to keep his job?
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Question:
You were recently hired to replace the manager of the Roller Division at a major conveyor
manufacturing company. Roller Manufacturing Company is relatively simple, requiring only labor...