Fast-food restaurants like McDonald’s are replacing cashiers with touch-screen ordering

Fast-food restaurants like McDonald’s are replacing cashiers with touch-screen ordering kiosks. Currently, the marginal product of another cashier is 48 customers served per hour; the marginal product of another kiosk is 32 customers served per hour. A cashier can be hired for a wage of $15; a kiosk rents for $12.

a. Is McDonald’s currently minimizing the cost of serving its customers?

b. Show how McDonald’s can improve its profits by changing its input mix.

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