Production Technology Choice for a Textile Firm
A textile firm aims to produce a standard batch of cloth at the lowest possible cost. The firm faces a wage rate of £10 per worker and a price of £5 per ton of coal. It is considering four different production technologies, each with different input requirements:
- Technology A: Requires 1 worker and 6 tons of coal.
- Technology B: Requires 4 workers and 2 tons of coal.
- Technology C: Requires 2 workers and 7 tons of coal.
- Technology D: Requires 5 workers and 1 ton of coal.
Based on the information provided, which technology should the firm choose to minimize its production costs? Justify your answer by calculating the total cost for the optimal technology.
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