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The MorTex Company assembles garments entirely by hand even though a textile ma-
chine exists that can assemble garments faster than a human can. Workers cost $50 per
day, and each additional laborer can produce 200 more units per day (i.e., marginal
product is constant and equal to 200). Installation of the first textile machine on the
assembly line will increase output by 1,800 units daily. Currently the firm assembles
5,400units per day.
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