A firm can produce a specific quantity of cloth using one of five available technologies, each requiring a different combination of labor (number of workers) and energy (tons of coal), as detailed in the table below. Note that technologies C and D are inefficient as other technologies use fewer inputs.
| Technology | Number of Workers | Tons of Coal |
|---|---|---|
| A | 1 | 6 |
| B | 4 | 2 |
| C | 3 | 7 |
| D | 5 | 5 |
| E | 10 | 1 |
Under which of the following economic conditions would a profit-maximizing firm be most likely to choose Technology E over the other available efficient technologies (A and B)?
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A firm can produce 100 meters of cloth using one of five available technologies, each with different requirements for labor (number of workers) and energy (tons of coal), as shown below:
- Technology A: 1 worker, 6 tons of coal
- Technology B: 4 workers, 2 tons of coal
- Technology C: 3 workers, 7 tons of coal
- Technology D: 5 workers, 5 tons of coal
- Technology E: 10 workers, 1 ton of coal
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Consider two methods for producing 100 meters of cloth. Method C requires 3 workers and 7 tons of coal. Method A requires 1 worker and 6 tons of coal. Based on this information, a profit-maximizing firm would always choose Method A over Method C, regardless of the wages paid to workers or the price of coal.
Five distinct technologies are available to produce a standard batch of cloth. Match each named technology to the combination of labor (workers) and energy (tons of coal) it requires.
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A firm can produce a specific quantity of cloth using one of five available technologies, each requiring a different combination of labor (number of workers) and energy (tons of coal), as detailed in the table below. Note that technologies C and D are inefficient as other technologies use fewer inputs.
Technology Number of Workers Tons of Coal A 1 6 B 4 2 C 3 7 D 5 5 E 10 1 Under which of the following economic conditions would a profit-maximizing firm be most likely to choose Technology E over the other available efficient technologies (A and B)?
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A company produces a standard amount of cloth and is currently using a technology that requires 4 workers and 2 tons of coal. If the price of coal were to increase significantly while the cost of labor stayed the same, a profit-maximizing company would logically consider switching to an available technology that uses more workers but less coal.