Adapting Production to Changing Input Prices

A firm is considering different technologies to produce 100 metres of cloth. One available technology requires 1 worker and 6 tons of an energy input. If the wage for a worker is £10 and the price of a ton of the energy input is £20, what is the total cost of production using this technology?

A firm produces 100 metres of cloth and is evaluating different production technologies. Given a wage of £10 per worker and an energy input price of £20 per ton, match each technology (described by its input requirements) to its total production cost.

A textile firm is producing 100 metres of cloth. Given a wage of £10 per worker and an energy input price of £20 per ton, a production technology requiring 5 workers and 5 tons of the energy input is more cost-effective than a technology requiring 4 workers and 2 tons of the energy input.

Impact of Changing Input Prices on Technology Choice

Cost-Minimization in Production

A textile factory manager is deciding which technology to use for producing 100 metres of cloth. The wage for a worker is £10, and the price per ton of an energy input is £20. The manager has the following options:

• Technology A: 1 worker, 6 tons of energy input
• Technology B: 4 workers, 2 tons of energy input
• Technology D: 5 workers, 5 tons of energy input
• Technology E: 10 workers, 1 ton of energy input

Which of the following statements correctly evaluates the options to identify the most cost-effective technology?

Evaluating a Production Technology Change

Technology B as the Least-Cost Technology at w=£10, p=£20

Analysis of Production Cost Trade-offs

Evaluating a Consultant's Technology Recommendation