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 1,000 gallons per day. Adding another 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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Given information is as follows MPL 1000 gallons per day MPM 200 gallons per d... View the full answer