Producing optimal b-l ratio


Problem: Tall Paul Stewart Brewery produces beer. The most popular style is Tall Paul Stewart Stout. The MBA's in marketing estimate TPS Stout's production function to be Q = 400L2B, where Q is the number of bottles of TPS Stout produced each week, L is the weekly labor hours, and B is weekly total hours running the bottling line. Each bottling line can operate 120 hours in a week. The cost of labor is $15/hour, and each bottling line costs $1200 per week.

Suppose TPS has 20 lines and is producing at an optimal B/L ratio. How many people does TPS employ to make Stout? Assume each person works 40 hours a week.

Solution Preview :

Prepared by a verified Expert
Microeconomics: Producing optimal b-l ratio
Reference No:- TGS01749894

Now Priced at $20 (50% Discount)

Recommended (92%)

Rated (4.4/5)