Imagine that you are an economist and that you have been hired by a mid-sized hammer factory to advise the management team regarding how many hammers they should make in one month.
Based on the scenario above, what information or guidelines would you take into account in helping to determine how many hammers the factory should make in a month?
How would you determine whether your recommendations had positive outcomes for the business?
How would pricing and materials costs factor into this?
When would you recommend the company revisit these decisions (for example, to see if you need to make any adjustments)? Why?