You were recently hired to replace the manager of the Roller Division a t a majo

Question

You were recently hired to replace the manager of the Roller Division a t a major conveyor-manufacturing firm, despite the manager’s strong external sales record. Roller manufacturing is relatively simple, requiring only labor and a machine that cuts and crimps rollers. As you begin reviewing the company’s production information, you learn that labor is paid $8 per hour and the last worker hired produced 100 rollers per hour. The company rents roller cutters and crimpling machines for $16 per hour, and the marginal product of capital is 100 rollers per hours. What do you think the previous manager could have done to keep his job?

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