e Suppose that installing and maintaining an ATM costs 20 and hiring a teller

E suppose that installing and maintaining an atm

This preview shows page 8 - 10 out of 12 pages.

e. Suppose that installing and maintaining an ATM costs $20, and hiring a teller costs $32. What will happen to Gloucester’s total number of customers served if it lays off 2 workers and installs 3 ATMs? What will happen to the bank’s costs?f. Using the idea developed in (e), if Gloucester Old Bank is interested in minimizing its costs, what strat-egy should it employ regarding its input mix? L $4 13. Baldor, Inc. measures the marginal rate of technical substitution (MRTS) at MP L/M P K= 3. The prices of labor and capital faced by Baldor are such that currently W/R= 4.a. Is Baldor minimizing its costs?b. What can Baldor do to improve its situation? MP r _ Goolsbee1e_Solutions_Manual_Ch06.indd 70 Goolsbee1e_Solutions_Manual_Ch06.indd 70 11/15/12 3:08 PM 11/15/12 3:08 PM
Image of page 8
Producer Behavior Chapter 6 71 Solution
Image of page 9
Image of page 10

You've reached the end of your free preview.

Want to read all 12 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture