Question: You are the manager of a large but privately held
You are the manager of a large but privately held online retailer that currently uses 17 unskilled workers and 6 semiskilled workers at its warehouse to box and ship the products it sells online. Your company pays its unskilled workers the minimum wage but pays the semiskilled workers $ 9.75 per hour. Thanks to government legislation, the minimum wage in your state will increase from $ 7.25 per hour to $ 8.15 per hour on July 24, 2013. Discuss the implications of this legislation for your company’s operations and in particular the implications for your optimal mix of inputs and long- run investment decisions.
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