You were recently hired to replace the manager of the


You were recently hired to replace the manager of the Roller Division at 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 $15 per hour and that the last worker hired produced 100 rollers per hour. The company rents roller cutters and crimping equipment for $16 per hour, and the marginal product of capital is 160 rollers per hour. What do you think the previous manager could have done to keep his job? Explain.

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Business Economics: You were recently hired to replace the manager of the
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