A firm can produce 100 metres of cloth using any of the five methods shown in the table, which specifies the number of workers and tonnes of coal required.
| Method | Workers | Tonnes of Coal |
|---|---|---|
| A | 1 | 10 |
| B | 2 | 7 |
| C | 4 | 4 |
| D | 7 | 2 |
| E | 10 | 1 |
Initially, the wage for a worker is £10 and the price of coal is £20 per tonne. Later, the wage increases to £40 per worker and the price of coal falls to £5 per tonne. How does the firm's most cost-effective choice of production method change in response to these new input prices?
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A firm can produce 100 metres of cloth using any of the five methods shown in the table, which specifies the number of workers and tonnes of coal required.
Method Workers Tonnes of Coal A 1 10 B 2 7 C 4 4 D 7 2 E 10 1 Initially, the wage for a worker is £10 and the price of coal is £20 per tonne. Later, the wage increases to £40 per worker and the price of coal falls to £5 per tonne. How does the firm's most cost-effective choice of production method change in response to these new input prices?
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