Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 16

The Workerbee Company employs 100 high school graduates and 50 college graduates at respective wages of $10 and $20. The total product for high school graduates is 1000 + 100QH, whereas the total product for college graduates is 5000 + 50QC. QH = the number of high school graduates, while QC = the number of college graduates. Is the company hiring the optimal amount of each type of worker If not, has it hired too many high school or too many college graduates Explain.