For the last ten years, the Universal Company has produced an average of 100 units per hour, 25 percent of which are defective, yielding 75 good units per hour. The board of directors now demands that top management increases productivity by 10 percent. The directives go out to the employees, who are told that instead of producing 100 units per hour, they must produce 110 units per hour. Responsibility for producing more units falls on the employees, creating stress, frustration, and fear. They try to meet the new demands, but must cut corners to do so. The pressure to raise productivity creates a defect rate of 25 percent and only increases production to 104 units, yielding 78 good units per hour, two fewer than the original 80 good units per hour. Calculate the percentage (%) change in productivity. (Round off to two decimal places).

For the last ten years, the Universal Company has produced an average of 100 units per hour, 25 percent of which are defective, yielding 75 good units per hour. The board of directors now demands that top management increases productivity by 10 percent. The directives go out to the employees, who are told that instead of producing 100 units per hour, they must produce 110 units per hour. Responsibility for producing more units falls on the employees, creating stress, frustration, and fear. They try to meet the new demands, but must cut corners to do so. The pressure to raise productivity creates a defect rate of 25 percent and only increases production to 104 units, yielding 78 good units per hour, two fewer than the original 80 good units per hour. Calculate the percentage (%) change in productivity. (Round off to two decimal places).

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter8: Costs And The Supply Of Goods

Section: Chapter Questions

Problem 15CQ

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