An independent trucker has the following options. If he buys expensive machinery then he can hire fewer drivers to deliver the same output. Over the course of this month he has to deliver to 50 spots. To do this job he has 4 possible combinations of output that he can use:
drivers $10 and machines $100
method 1 20drivers 10machines
method 2 50drivers 2machines
method 3 100drivers 0machines
method4 10drivers 12machines
Which one is the best? Do we use the production function equation? Or are we considering fixed cost vs variable costs? Where do we start with this one?