Why did the firm replaced the previous manager

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Reference no: EM132407259

You were recently promoted to a management position of a firm that produces a certain popular widget, replacing the previous manager. The firm uses only two types of labor when producing the product: experienced workers and unskilled workers. The firm can hire as many workers as needed. Unskilled workers are paid a wage of $10 per hour and experienced workers $50 per hour.

In your initial analysis, you learn that at the current amounts of labor, the marginal product of unskilled labor is 50 and a marginal product of experienced labor is 100.

Why did the firm replaced the previous manager and promoted you? Explain in detail.

Reference no: EM132407259

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