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(Solved): Caius is considering buying some new sewing machines for his jacket business. The marginal product o ...
Caius is considering buying some new sewing machines for his jacket business. The
marginal product of each machine is given by:
MPK=12-1.25K
where K is the number of machines he buys. Each machine costs ($3300-300k) which he'd
finance by borrowing at a rate of 2.5%. The machines are expected to lose 6.5% of
their value each year.
A. If he can sell each jacket for $45, how many machines should he buy?