Business

Wellstone is a furniture manufacturer for the residential market that creates a variety of furniture pieces for dining room, livingroom and bedroom. One of the company’s strategies has been to hold prices fixed at their current levels. At a management meeting thepresident of the company asked about the company’s production goals for the next quarter. The operations manager responded in favorof increasing production and thinks that it would not affect their average costs, or may even lower them. Assuming that labor is theonly variable input, is the operations manager conclusion about increase production right? Explain you answer using the relevantproduction metrics such us ATC, MC, VC, FC, productivity, etc. (250 world limit)