[Solution Library] A consulting firm has just finished a study for a manufacturer of wine. It has determined that an additional man-hour of labor would increase
Question: A consulting firm has just finished a study for a manufacturer of wine. It has determined that an additional man-hour of labor would increase wine output by 1000 gallons per day. Adding an additional machine-hour of fermentation capacity would increase output by 200 gallons per day. The price of a man-hour of labor is $10 per hour. The price of a machine-hour of fermentation capacity is $0.25 per hour. Is there a way for the wine manufacturer to lower its total costs of production and yet keep its output constant?? If so, what is it??
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