Final answer:
Tyler should select production technology 3 because of its lower total cost, adjusting to production technology 2 if machine costs rise. The firm's output, prices, and labor employment should be balanced with market demand, costs, and competition.
Step-by-step explanation:
To determine how Tyler should handle the presented situation to maximize production, several decisions must be made regarding the operations of the firm. The firm needs to choose which products to produce based on market demand and the firm's own strengths and capabilities. Regarding the production process, production technology 3 should be selected initially because it offers the lowest total cost due to cheaper machine hours. However, if the situation changes and the cost of machines increases, the firm should adjust and consider production technology 2, which may become more cost-effective in light of the increased cost of capital. The amount of output the firm should produce must align with market demand to avoid overproduction or shortages. When pricing products, the firm should set a price that covers costs, provides a profit margin, and remains competitive within the market. Lastly, the firm must consider how much labor to employ, striking a balance between sufficient staffing to meet production goals and keeping labor costs under control.
Each decision Tyler makes should be data-driven, considering both internal cost structures and external market factors. Technology selections and labor decisions will pivot according to shifts in production costs and market dynamics.