Question

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Answer 1

a) The manufacturer will try to maximize the difference between output and input. Neither outputs nor inputs are fixed and he will try to maximize profits which is by maximizing the difference between the inputs and outputs(He will increase the outputs as long as the gain is larger than the additional overtime pay)

b) The engineering firm has been awarded the contract and the output and the money will be constant according to the specifications. Therefore the main criterion will be to minimize the inputs.

c) The off campus bookstore will target the used/new split according to the total profit he will gain. Higher new books will mean higher inputs, but the total profit depends on the demographic i.e. based on how many people prefer buying new books and how many used, and the bookstore will try to maximize the difference between outputs and inputs

d) The bidder will try to minimize inputs. Since the porcelain statue remains the same the main criterion will be to minimize the inputs(The bid he will have to pay to get the statue)

Hope it's clear. Do ask for any clarifications required.