In marketing, we use which terms? (needs, wants, or demands). Why?

Answers

Answer 1

Answer:

needs are things that satisfy the basic requirement. Wants are requests directed to specific types of items.


Related Questions

How are changes in U.S. demographics affecting the workplace relative to demographic changes in our traditional competitors

Answers

Answer:

The changes in demographics are affecting the workplaces in both positive and negative manner. With continuous immigration of workforce from Asian countries and neighbor countries like Mexico, America is facing some serious crises of jobs shortage.

On the other hand, due to such import of human resource companies are able to get best talent inn hand to operate their activities.

Patty took a cash advance of $1,500. Her new credit card charges an Annual Percentage Rate of 21%. The transaction fee for the cash advance is 3% of the amount of the advance, with a minimum fee of $35. This fee is added to the total cash advance, and accrues interest.

Hint: calculate 3% of 1,500. Add that 3% to the original cash advance of 1,500. This becomes your charged amount.

If Patty makes monthly payments of $65:

What is the total amount Patty will end up paying for the cash advance?

Answers

I honestly don’t kno

During a team meeting, a team member asks about the measurements that will be used on the project to assess performance. The team member feels that some of the measures related to the activities assigned to him are not valid measurements. The project is BEST considered to be in what part of the project management process?

Answers

Answer:

The answer is "Executing".

Explanation:

In this inquiry, it is stated that certain of the measurements used to evaluate a team member's efforts are deemed invalid. As a result, he'll have to work during the project's executing phase, when project deliverables are created and project participants execute the majority of the labor. During this team meeting, one of the members inquires about the project's performance measurements, that's why Executing is the correct choice.

Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,000 units per year for $7.50 each. Mohave has the following information about the cost of producing tote bags:
Direct materials $3
Direct labor 2
Variable manufacturing overhead 1
Fixed manufacturing overhead 2
Total cost per unit $8
Mohave has determined that all variable costs could be eliminated by outsourcing the tote bags, while 60 percent of the fixed overhead cost is unavoidable. At this time, Mohave has no specific use in mind for the space currently dedicated to producing the tote bags.
Required:
1. Compute the difference in cost between making and buying the umbrella tote bag.
2. Based strictly on the incremental analysis, should Mohave buy the tote bags or continue to make them?
3. Suppose that the space Mohave currently uses to make the bags could be utilized by a new product line that would generate $10,000 in annual profits. Recompute the difference in cost between making and buying the umbrella tote bag. Does this change your recommendation to Mohave? If so, how?
4. Assume Mohave has a sustainability goal to increase the percentage of spending from local suppliers. If Mohave’s managers are responsible for improving this metric, how might it impact their sourcing decisions?
5. What other strategic or sustainability-related goals should Mohave consider before making a final decision?

Answers

Answer:

Mohave Corp.

1. Cost Differences:

Relevant costs:

                                                     Make             Buy        Difference

Direct materials                              $3

Direct labor                                       2

Variable manufacturing overhead   1

Fixed manufacturing overhead       0.80

Total cost per unit                          $6.80        $7.50          $0.70

Annual Units                                  8,000        8,000          8,000

Total costs                                 $54,400   $60,000       $5,600

2. Based strictly on the incremental analysis, Mohave should continue to make the tote bags.

3. The recommendation is changed.  Mohave should buy the tote bags from outside.  Buying from outside increases operating income by $4,400.

Explanation:

a) Data and Calculations:

Price per unit from outside supplier = $7.50

Direct materials                             $3

Direct labor                                      2

Variable manufacturing overhead 1

Fixed manufacturing overhead     2

Total cost per unit                        $8

Relevant costs:

                                                     Make             Buy        Difference

Direct materials                              $3

Direct labor                                       2

Variable manufacturing overhead   1

Fixed manufacturing overhead       0.80

Total cost per unit                          $6.80        $7.50          $0.70

Annual Units                                  8,000        8,000          8,000

Total costs                                 $54,400   $60,000       $5,600

Relevant costs:

                                                     Make             Buy        Difference

Direct materials                              $3

Direct labor                                       2

Variable manufacturing overhead   1

Fixed manufacturing overhead       0.80

Total cost per unit                          $6.80        $7.50          $0.70

Annual Units                                  8,000        8,000          8,000

Total costs                                 $54,400   $60,000       $5,600

Annual profits from new product        0     (10,000)     $10,000

Total net costs                          $54,400   $50,000       $4,400

The concept of market efficiency underpins almost all financial theory and decision models. When financial markets are efficient, the price of a security—such as a share of a particular corporation’s common stock—should be____the present value estimate of the firm’s expected cash flows discounted by its appropriate rate of return (also called the intrinsic value of the stock).
Almost all financial theory and decision models assume that the financial markets are efficient. The informational efficiency of financial markets determines the ability of investors to "beat" the market and earn excess (or abnormal) becomes available. Financial theorists have identified three levels of informational efficiency that reflect what information is incorporated in stock prices.
Consider the following statement, and identify the form of capital market efficiency under the efficient market hypothesis based on this statement.
Current market prices reflect all relevant publicly available information.
This statement is consistent with:_____.
A. Strong-form efficiency.
B. Weak-form efficiency.
C. Semistrong form efficiency.
Consider that there is a semistrong-form of efficiency in the markets.
A pharmaceutical company announces that it has received Federal Drug Administration approval for a new allergy drug that completely prevents hay fever The consensus analyst forecast for the company's earnings per share (EPS) is $4.50, but insiders know that, with this new drug, earnings will increase and drive the EPS to $5.00. What will happen when the company releases its next earnings report?
A. There will be some volatility in the stock price when the earnings report is released: it is difficult to determine the impact on the stock price.
B. The stock price will not change, because the market already incorporated that information in the stock price when the announcement was made.
C. The stock price will increase and settle at a new equilibrium level.

Answers

Answer:

sry I don't know the answer

sry

Trader M places a System Order to buy 100 shares of ABC stock at a price two cents below the best non-Nasdaq participant on the same side of the market. This is what type of order

Answers

Answer:

Limit order

Explanation:

There are various types of orders placed on nasdaq. These order include, market orders, limit order, All or none order, Immediate or cancel order and like wise. When a buyer places an order to buy the stock below current market price, this is type of limit order.

What is the present value of an investment that will pay $2,000 at the end of the year when interest is compounded annually at 5.10%

Answers

Answer:

the present value of an investment is $1,902.94

Explanation:

The computation of the present value of an investment is given below:

present value

= Future value ÷ (1 + rate of interest)^time period

=$2,000 ÷ (1+.051)^1

= $2,000 ÷ 1.051

= $1902.94

Hence, the present value of an investment is $1,902.94

An educational institution has total direct labor and material costs of $1964 per student. Its fixed costs are $352,800. Total revenues for the year were $1,800,000. It had 800 students in the past year. How many students should they accept in the next year to break even assuming the variable cost margins are equal to this year, and assuming fixed costs are to increase by $19,000 due to increased rent for expansion? (round to the nearest whole number).

Answers

Answer:

1300 students

Explanation:

The computation of the no of students to be accepted for break even is given below:

Fixed cost is

= $352,800 + $19,000

= $371,800

Revenue per student is

= $1,800,000 ÷ 800

= 2250

And,

Variable cost per student = 1964

So,  

Contribution margin = Revenue - Variable cost  

= $2,250 - $1,964

= $286

Break even point is

= Fixed cost ÷ Contribution margin per unit

= 371800÷  286

= 1300 students

Song, Inc., uses the high-low method to analyze cost behavior. The company observed that at 22,000 machine hours of activity, total maintenance costs averaged $33.40 per hour. When activity jumped to 25,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $30.40.On the basis of this information, the variable cost per machine hour was:___________A. $8.40.B. $22.00.C. $25.00.D. $30.40.E. $33.40.

Answers

Answer:

Variable cost per unit= $8.4

Explanation:

First, we need to calculate the total cost for each level of machine hours:

Low activity level:

Total cost= 22,000*33.4= $734,800

High activity level:

Total cost= 25,000*30.4= $760,000

Now, we can determine the variable and fixed costs:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (760,000 - 734,800) / (25,000 - 22,000)

Variable cost per unit= $8.4

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 760,000 - (8.4*25,000)

Fixed costs= $550,000

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 734,800 - (8.4*22,000)

Fixed costs= $550,000

Use the following selected balance sheet and income statement information for Caroline Supply Co. (in millions) to compute asset turnover (AT) to the nearest hundredth of a percent.
Operating profit before tax Earnings without interest expense (EWI) Average total assets Sales Tax rate on operating profit
$58,300 $93,400 $360,600 $1,135,420 35%

Answers

Answer:

3.15 times

Explanation:

Asset turnover = Sales revenue / Average total assets

Asset turnover = $1,135,420 / $360,600

Asset turnover = 3.15 times

The following data are from the financial statements of the Riverton Company.
Current assets $55,000
Total liabilities $95,000
Total assets 125,000
Net income 18,000
Current liabilities 25,000
Sales 275,000

Answers

Answer:

then what i have to found

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 5 years ago for $9,639,708 in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $3,650,288. An engineer was hired to study the land at a cost of $810,081, and her conclusion was that the land can support the new manufacturing facility. The company wants to build its new manufacturing plant on this land; the plant will cost $6,880,840 million to build, and the site requires $529,656 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

Answers

Answer:

the proper cash flow amount is $11,060,784

Explanation:

The computation of the proper cash flow amount is shown below:

= land value + plant value + grading value

= $3,650,288 + 6,880,840 + $529,656

= $11,060,784

Hence, the proper cash flow amount is $11,060,784

So the same should be considered and relevant

Sardi Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 17,000 of the components each year. The unit product cost of the component according to the company's cost accounting system is given as follows:
Direct materials $ 8.20
Direct labor 8.30
Variable manufacturing overhead 1.20
Fixed manufacturing overhead 4.30
Unit product cost $ 22.00
Assume that direct labor is a variable cost. Of the fixed manufacturing overhead, 70% is avoidable if the component were bought from the outside supplier. In addition, making the component uses 2 minutes on the machine that is the company's current constraint. If the component were bought, time would be freed up for use on another product that requires 4 minutes on this machine and that has a contribution margin of $7.00 per unit. When deciding whether to make or buy the component, what cost of making the component should be compared to the price of buying the component?
A) $20.71 per unit.
B) $22.00 per unit.
C) $25.50 per unit.
D) $24.21 per unit.

Answers

B.) $22.00 per unit you will be adding nd dividing

how to assess a peers written assignment​

Answers

I don't understand ur question

how to assess a peers written assignment b
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Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $9,138. FICA tax for Social Security is 6.2% on the first $128,400 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,516.27. What is the amount of the employer's payroll taxes expenses for this employee

Answers

Answer:

$ 1,119.06

Explanation:

It is given that :

Gary Marks total earning = $ 9,138

The social security tax = 6.2%

The Medicare tax = 1.45%

We known, the FUTA and the SUTA must only be applied to the first $7000 earned from Gary's pay.

So, the employer's payroll taxes expenses = Social security + Medicare + FUTA + SUTA

    = ($9,138 x 6.2%) + ($9,138 x 1.45%) + ($7000 x 0.6%) + ($7000 x 5.4%)

    = 566.56 + 132.5 + 42 + 378

    = $ 1,119.06

Therefore, the amount of the employer's payroll taxes expenses is $1,119.06

On January 1, 2019, Eagle Company borrows $23,000 cash by signing a four-year, 9% installment note. The note requires four equal payments of $7,099, consisting of accrued interest and principal on December 31 of each year from 2019 through 2022. Prepare the journal entries for Eagle to record the note's issuance and the four payments

Answers

Answer:

See below

Explanation:

January 01, 2019

Cash Dr $23,0000

______________Notes payable Cr $23,000

December 31, 2019

Interest expense Dr $2,070

($23,000 × 9%)

Notes payable Dr $5,029

____________________Cash Cr. $7,099

December 31, 2020

Interest expense Dr $1,617

($23,000 - $5,029) × 9%

Notes payable Dr $5,082

_________________ Cash Cr $7,099

December 31, 2021

Interest expense Dr $1,160

($23,000 - $5,029 - $5,082) × 9%

Notes payable Dr $5,939

___________________ Cash Cr $7,099

December 31, 2022

Interest expense Dr $626

($23,000 - $5,029 - $5,082 - $5,939) × 9%

Note payable Dr $6,473

_____________________ Cash Cr $7,099

Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its production. Bishop currently is purchasing 26,000 units from an outside supplier for $16 per unit. Polk is currently operating at less than its full capacity of 630,000 units and has variable costs of $9 per unit. The full cost to manufacture the unit is $12. Polk currently sells 460,000 units at a selling price of $18 per unit.
a. What will be the effect on Avery Company’s operating profit if the transfer is made internally?
b. What is the minimum transfer price from Polk’s perspective?
c. What is the maximum transfer price from Bishop’s perspective?

Answers

Answer:

a. The effect is that Avery Company’s operating profit will increase by $182,000 if the transfer is made internally.

b. Minimum transfer price = $9

c. Maximum transfer price from Bishop’s perspective = $16.

Explanation:

a. What will be the effect on Avery Company’s operating profit if the transfer is made internally?

To determine this, fixed cost is ignored because it considered irrelevant. Therefore, we have:

Profit per unit = Purchase price from outside - Variable cost of production internally = $16 - $9 = $7

Total increment in operating profit = Current purchase unit of Bishop * Profit per unit = 26,000 * $7 = $182,000

Therefore, Avery Company’s operating profit will increase by $182,000 if the transfer is made internally.

b. What is the minimum transfer price from Polk’s perspective?

Since Polk is currently operating at less than its full capacity, this implies that it will not incur additional fixed cost to produce current purchase units of Bishop. Therefore, only its variable cost of $9 will have to recovered. By implication, we have:

Minimum transfer price = Variable cost = $9

c. What is the maximum transfer price from Bishop’s perspective?

Any price that is higher than $16 at which Bishop is currently purchasing from an outside supplier will result in a loss for Bishop and the increment profit of $182,000 will be lost by Avery Company. This therefore implies that:

Maximum transfer price from Bishop’s perspective = Price at which Bishop is currently purchasing from an outside supplier = $16

Winner Corporation acquired 80 percent of the common shares and 70 percent of the preferred shares of First Corporation at underlying book value on January 1, 20X9. At that date, the fair value of the noncontrolling interest in First's common stock was equal to 20 percent of the book value of its common stock. First's balance sheet at the time of acquisition contained the following balances:
Total Assets $600,000 Total Liabilities $90,000
Preferred Stock 100,000
Common Stock 150,000
Retained Earnings 260,000
Total Assets $600,000 Total Liabilities and
Equities $600,000
The preferred shares are cumulative and have a 10 percent annual dividend rate and are four years in arrears on January 1, 20X9. All of the $5 par value preferred shares are callable at $6 per share. During 20X9, Shovel reported net income of $100,000 and paid no dividends.
Required information
Based on the preceding information, what is First's contribution to consolidated net income for 20X9?
a. $80,000
b. $100,000
c. $90,000
d. $50,000

Answers

Answer:

b. $100,000

Explanation:

Based on the information given , the FIRST'S CONTRIBUTION TO CONSOLIDATED NET INCOME for 20X9 will be NET INCOME amount of $100,000 because During the year 20X9, the company reported NET INCOME of $100,000 in which they paid no dividends.

Therefore First's contribution to consolidated net income for 20X9 is $100,000

MC Qu. 120 Dallas Company uses a job order... Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $4,160,000 (260,000 hours at $16/hour) and that factory overhead would be $1,560,000 for the current period. At the end of the period, the records show that there had been 240,000 hours of direct labor and $1,260,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead rate

Answers

Answer:

See below

Explanation:

Per the given details, predetermined overhead is be calculated as seen below

Predetermined overhead = (Estimated factory overhead / Estimated direct labor hour) × 100

Estimated factory overhead = $1,560,000

Estimated direct labor hour = 260,000

Predetermined overhead = )$1,560,000 / 260,000) × 100

Predetermined overhead rate = 600%

Which of the following is a component of the talent acquisition function of HR management?
Group of answer choices

Recruiting

Training

Career planning

Orientation

Answers

Answer:

Recruiting

Explanation:

Recruitment is the process of hiring individuals in an organization to accomplish the tasks assigned. It is the process carried by the Human Resource Management in an organization. The HR management is responsible to organize and manage the human talents and recruit them respectively. The talent are recognized by the team and are hired to meet the goals of the organization.

The focus on establishing relationships with all customers has given way to a more targeted effort to seek higher-value customers.
A. True
B. False

Answers

it’s true the more comfortable you make the customer feel the better they feel coming to the place you are

Kuley plans to retire in 8 years with $263,700 in her account, which has an annual return of 8.17 percent. If she receives annual payments of X, with her first payment of X received in 8 years and her last payment of X received in 15 years, then what is X, the amount of each payment

Answers

Answer:

Kuley

If she receives annual payments of X, with her first payment of X received in 8 years and her last payment of X received in 15 years, then the amount of each payment is:

X = $50,944.35

Explanation:

a) Data and Calculations:

Amount in savings account in 8 years' time = $263,700

Annual return rate = 8.17%

Period of savings from Year 8 to Year 15 = 7 years

Annual payments = X

X = $50,944.35

From an online financial calculator, the payment is determined as follows:

N (# of periods)  7

I/Y (Interest per year)  8.17

PV (Present Value)  263700

FV (Future Value)  0

Results

PMT = $50,944.35

Sum of all periodic payments $356,610.45

Total Interest $92,910.45

a) Take a real time example of a company of your own choice working in Pakistan and then discuss the factors that lead to pressure for local responsiveness. Discuss it in detail. Draw diagram to show the effect.

Answers

Answer:

This responsiveness also promotes the local market orientation of a subsidiary and therefore the strength of its existing network with the businessmen and government authorities.

Explanation:

Usually, firms working within the global market confront two sorts of competitive pressure. They face pressure to scale back costs and pressure to react locally. These competing forces throw a corporation into conflict. It's going to also need a corporation to supply a consistent product on the international market to downstream the experience curve as soon as feasible. In response to local pressures, however, it's necessary for a firm to differentiate its product offering and marketing strategy from one country to a different in an effort to satisfy the various demands arising from domestic consumer preferences, business practices, channels of distribution, competitive conditions and public policies. Because it's going to entail substantial redundancy and a scarcity of product standards to adapt products to varied domestic needs, the result could also be a rise in prices.

While some organizations, like Company A, face a high to scale back cost and low for the reaction of locally, while others, like Company B, face low to scale back costs and high for local reaction, many companies are within the situation of Company C.  It suggests and supports three layers of variables, including environmental, structural, and organizational responsiveness. The analysis of 168 MNE companies within the People's Republic of China shows that environmental complexity and therefore the uniqueness of business culture increase local reaction. Structural variables like the intensity of competition, heterogeneity of demand and localisation of components increase local reaction.

On November 1, 20Y9, Lexi Martin established an interior decorating business, Heritage Designs. During the month, Lexi completed the following transactions related to the business:
Nov. Lexi transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $27,100.
1Paid rent for period of November 1 to end of month, $3,300.
6Purchased office equipment on account, $12,840.
8Purchased a truck for $30,500 paying $7,000 cash and giving a note payable for the remainder.
10Purchased supplies for cash, $1,740.
12Received cash for job completed, $7,500.
15Paid annual premiums on property and casualty insurance, $2,300.
23Recorded jobs completed on account and sent invoices to customers, $12,410.
24Received an invoice for truck expenses, to be paid in November, $1,400.
Enter the following transactions on Page 2 of the two-column journal:Nov. 29 Paid utilities expense, $4,500. 29 Paid miscellaneous expenses, $1,000. 30 Received cash from customers on account, $9,000. 30 Paid wages of employees, $6,800. 30 Paid creditor a portion of the amount owed for equipment purchased on November 6, $3,000. 30 Paid dividends, $2,500. how it do Journal

Answers

Answer:

looks good no mistakes and uh b if this is a question

During normal economic times, unemployment in Europe tends to be ________ than in the United States mainly because of ________.

Answers

Answer:

higher; labor market regulations

Explanation:

I hope this helps you!

Ajax Inc. was formed on April 25 and elected a calendar year for tax purposes. Ajax paid $13,200 to the attorney who drew up the articles of incorporation and $7,100 to the CPA who advised the corporation concerning the accounting and tax implications of its organization. Ajax began business operations on July 15. To what extent can Ajax deduct its $20,300 organizational costs on its first tax return

Answers

Answer: $5510

Explanation:

For organizations cost up to $50,000, there'll be a deduction of $5000. The remaining non deductible expense will then be spread out for 180 months. Here, the non deductible cost will be:

= ($13200 + $7100) - $5000

= $20300 - $5000

= $15300

The capitalized cost will then be:

= $15300 / 180

= $85 per month.

Since there's an ammortization of 6 months from July, then the capitalized cost will be:

= $85 × 6

= $510

Therefore, the amount that should be deducted on its first tax return will be:

= $5000 + $510

= $5510

Brenda, the sales manager of a firm, wants to generate a particular report containing sales analyses of the second and third quarter of the year. She should use a ________ to retrieve the information that she wants from the database. Group of answer choices

Answers

Answer: query

Explanation:

Since Brenda wants to generate a particular report containing sales analyses of the second and third quarter of the year, then she should use a query to get the information.

The query refers to a request that can be used to get data or information from the database table. The data gotten can be in form of graphs, pictorials or complex results, such as trend analyses etc

Setting a passing score for whites at 80 out of 100 and a passing score of 60 out of 100 for minority applicants in an admission test is an example of race norming.
A. True
B. False

Answers

Answer: True

Explanation:

Race norming simply refers to the practice whereby two different cut off test scores are set for employment which is based on race. Race-norming, is also referred to as the within-group score conversion and it has to do with the adjustment of test scores in order to account for the ethnicity of the test-taker.

Since a passing score for whites was set at 80 out of 100 while a passing score of 60 out of 100 was set for the minority applicants, then it's an example of race norming.

Cyclical unemployment arises when:______.
a. the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation's food supply.
b. labor unions strike for higher wages.
c. the business cycle enters an expansionary phase.
d. business activity in the macroeconomy declines.

Answers

Answer:

D

Explanation:

types of unemployment

structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.  

The geologist lost his hob permanently due to increase in wages (polices)

Frictional unemployment:  the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.

Voluntary unemployment: e.g. worker at a fast-food restaurant who quits work and attends college.

Cyclical unemployment: it occurs as a result of fluctuations in the economy. Unemployment would be high in a downturn and low in a boom  

Suppose a chair manufacturer finds that the marginal rate of technical substitution​ (MRTS) of capital for labor in her production process is substantially than the ratio of the wage rate for​ assembly-line labor​ (w) to the rental rate on machinery​ (r). How should she alter her use of labor and capital to minimize the cost of​ production? Holding output​ constant, the chair manufacturer should use ▼ less more labor and ▼ more less capital.

Answers

Answer:

The chair manufacturer should use less labor and more capital.

Explanation:

Note: This question is not complete because the important word less is omitted. The complete question is therefore provided before answering the question as follows:

Suppose a chair manufacturer finds that the marginal rate of technical substitution (MRTS) of capital for labor in her production process is substantially less than the ratio of the wage rate for assembly-line labor (w) to the rental rate on machinery (r). How should she alter her use of labor and capital to minimize the cost of production? Holding output constant, the chair manufacturer should use [less/more] labor and [more/less] capital.

Explanation of the answer is now provided as follows:

The marginal rate of technical substitution (MRST) is the amount by which the quantity of one input must be reduced when one more unit of another input is used to keep output constant.

In order to minimize cost of production while holding output constant, when the MRTS of capital for labor is substantially greater than the ratio of w to r, it implies that less capital and more labor should be used; but when the MRTS of capital for labor is substantially less than the ratio of w to r, it implies that more capital and less labor should be used.

Based on the above explanation, the chair manufacturer should use less labor and more capital.

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