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Selecting the appropriate level of aircraft skin forming machines: The A-1 Corporation supplies airplane manufactures with preformed aircraft skin panels that are used on the exterior of aircraft. Aircraft skinforming machines required too manufacture these panels can be leased on an as needed basis for $12,500 each. Given the complexity of working with exotic metals used in the manufacturing process,workers are highly skilled, but due to an overall recession in the economy a worker can be hired at a monthly rate of $8500. The market price for one of A-1's panels is $70. Based on the production data inthe following table, determine how may workers A-1 should hire to maximize profits. Answer the question below.AircraftIncremeM arginal Price of ntalProfitskinNumber ofValue offormingmachinesPanelsAverageProduct0MarginalProductProductWorkersProducedPriceProductInput16501100231400841550168017201. What is the decision rule that determines the number of workers to hire?2. How many workers do you hire?3. What is your rational?

Question
Selecting the appropriate level of aircraft skin forming machines: The A-1 Corporation supplies airplane manufactures with preformed aircraft skin panels that are used on the exterior of aircraft. Aircraft skin
forming machines required too manufacture these panels can be leased on an as needed basis for $12,500 each. Given the complexity of working with exotic metals used in the manufacturing process,
workers are highly skilled, but due to an overall recession in the economy a worker can be hired at a monthly rate of $8500. The market price for one of A-1's panels is $70. Based on the production data in
the following table, determine how may workers A-1 should hire to maximize profits. Answer the question below.
Aircraft
Increme
M arginal Price of ntal
Profit
skin
Number of
Value of
forming
machines
Panels
Average
Product
0
Marginal
Product
Product
Workers
Produced
Price
Product
Input
1
650
1100
2
3
1400
8
4
1550
1680
1720
1. What is the decision rule that determines the number of workers to hire?
2. How many workers do you hire?
3. What is your rational?
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Selecting the appropriate level of aircraft skin forming machines: The A-1 Corporation supplies airplane manufactures with preformed aircraft skin panels that are used on the exterior of aircraft. Aircraft skin forming machines required too manufacture these panels can be leased on an as needed basis for $12,500 each. Given the complexity of working with exotic metals used in the manufacturing process, workers are highly skilled, but due to an overall recession in the economy a worker can be hired at a monthly rate of $8500. The market price for one of A-1's panels is $70. Based on the production data in the following table, determine how may workers A-1 should hire to maximize profits. Answer the question below. Aircraft Increme M arginal Price of ntal Profit skin Number of Value of forming machines Panels Average Product 0 Marginal Product Product Workers Produced Price Product Input 1 650 1100 2 3 1400 8 4 1550 1680 1720 1. What is the decision rule that determines the number of workers to hire? 2. How many workers do you hire? 3. What is your rational?

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Step 1

(1)

The aforementioned table can be written as follows:

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Step 2

Here, the average product is estimated by taking the ratio of no. of panels produced to no. of worker’s hired whereas the marginal product is estimated by taking the difference of no. panels produced when no. of worker’s hired rises by one unit.

Furthermore, according to the decision rule, a firm must hire workers as long as their value ...

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