Answer:
The expansion should be adding more workers.
Explanation:
In this case we must analyze the marginal productivity of each production factor and relate it to its cost.
The marginal productivity of the copiers, assumed constant, can be calculated as
[tex]\frac{\Delta P}{\Delta c}=\frac{20,000}{2}=10,000[/tex]
In other words, evevry copier added will rise production in 10,000 pages/day.
The marginal productivity of the copiers, assumed constant, can be calculated as
[tex]\frac{\Delta P}{\Delta w}=\frac{25,000}{5}=5,000[/tex]
Every worker added will increase production in 5,000 pages/day.
If the cost of a copier is 4 times the cost of a worker, the break-even point should be when the copier marginal productivity is 4 times the marginal productivity of a worker.
That means that the new copier has to produce a marginal production of at least 4*5,000=20,000 pages per day.
Because the marginal productivity of the copier is below this break-even point (10,000<20,000), we can conclude that the expansion should be adding more workers, as long as the marginal productivities remain the same.