A company that produces elevators, transferred from Mexico to US. But the company in US is...
A company that produces elevators, transferred from Mexico to US. But the company in US is not maximizing profits. The problem gives this information: - 100 unskilled worker, produce 4 elevators/day, and the cost per worker is $80/day. - 20 skilled workers, produce 5 elevators/day, and cost per worker is $100/day - 40 skilled machinist, produce 6 elevators/day, and cost per worker is $140/day - 50 skilled electrician, produce 8 elevators/day, and the cost per worker is $200/day . Find why the company is not maximizing profit. And explain how can they maximize it The person in charge of hiring new people is an electrician. Explain how the X-inefficiency applies in this case. And what can be done.
Homework Answers
Solution:
Efficiency of X can be improved by imparting intensive training and technical knowledge.According to Adamsmith ,principle of division of labour can be applied so that labourers can be specialised in particular job and efficiency can be raised by doing specialised job labourers now can be produced, manufactured more products than previously. Cost of production can be minimized by reducing input cost. Labourers will be given leisure, social security and stability like family pension, over-time wages and flexibility in working hours.
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A company that produces elevators, transferred from Mexico to
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