Peter Piper picks a peck of pickled peppers using 10 units of labor and two pepper-picking machines. The last worker hired picked 100 peppers, and the last machine added 1,000 peppers. If labor can be hired at $5 a pepper picker and machines cost $5,000 . what advice do you have for Peter Piper?
Optimal use of two variable inputs calls for equality of MPP/P for all inputs. The last worker added MPP = 100 and cost $5, for a ratio of 20 . The last machine added MPP = 1,000 and cost $5,000 . for a ratio of 0.2 . Peter Piper should substitute more labor in place of machines, since workers are producing far more peppers per dollar of input cost.
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