Economics 19th Edition by Stanley Brue, Cambell McConnell, Campbell McConnell, Sean Masaki Flynn, Sean Flynn

Exercise 5

Refer to Figure 23.1b and assume that price is fixed at $37,000 and that Buzzer Auto needs 5 workers for every 1 automobile produced. If demand is D M and Buzzer wants to perfectly match its output and sales, how many cars will Buzzer produce and how many workers will it hire If instead, demand unexpectedly falls from D M to D L , how many fewer cars will Buzzer sell How many fewer workers will it need if it decides to match production to thesesales