Brogdon Is a Ski Instructor Looking for Employment in the Oregon

question 68

Essay

Brogdon is a ski instructor looking for employment in the Oregon mountains. He has received full-time job offers from two ski lodges, and must choose between them. The two jobs seem equally attractive, so Brogdon wants to choose the lodge which will pay him the higher compensation. Running Elk Lodge offers a wage of $8.00 per hour for a 40 hour week, plus 30% of the fees paid by walk-on pupils desiring private lessons, plus 40% of fees from pupils who specifically request a private lesson from Brogdon. Blustery Ridge Lodge offers a wage of only $6.00 per hour, plus 25% of walk-on privates lesson fees, 45% of request privates lesson fees, and 15% of the fees paid by walk-on groups. Both lodges charge skiers $50 for private lessons and $100 per 5-person group for group lessons. Brogdon's previous experience leads him to expect weekly volume of 15 walk-on privates, 6 request privates, and 20 walk-on groups.
Required:
Which job should Brogdon accept? What factors should Brogdon consider in making his choice?

Identify the implications of cost changes on production levels and firm’s efficiency.

Understand the concept and implications of economies of scale and diseconomies of scale.

Identify conditions under which a firm experiences economies of scale, constant returns to scale, and diseconomies of scale based on total cost patterns.

Comprehend the difference between rising, falling, and constant long-run average total costs.

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Definitions:

She

"She" is a pronoun used to refer to a female person or animal.

Trustees

Individuals or members of a board given control or powers of administration of property in trust with a legal obligation to manage it solely for the beneficiary's benefit.

President

A president is the elected head of state in a republic, responsible for executing government policies, making executive decisions, and often serving as the symbolic leader of the country.

Carpeting

Carpeting refers to the material used to cover and decorate floors, made of thick fabric, and is used for warmth, comfort, and aesthetic purposes.