Final answer:
The correct interpretation of the regression model indicates that for every additional machine hour, there is a $10 increase in the total Repairs & Maintenance cost, not $10,000 as incorrectly stated in the typo. The additional provided excerpts discuss how labor costs, machine costs, and union negotiations can influence a firm's decision on production methods, leaning towards more capital-intensive approaches to maintain or reduce the total cost.
Step-by-step explanation:
The provided equation for total Repairs & Maintenance (R&M) cost in the regression model is Y = $100,000 + $10X, where Y represents the total R&M cost and X represents machine hours. However, the question includes a typo stating an increase of 1 machine hour is associated with an increase of $10,000 in total R&M cost, which is incorrect according to the given equation. The correct interpretation of the equation should be that for each additional machine hour (X), the total R&M cost (Y) increases by $10, not $10,000.
The information provided in the multiple excerpts discusses various costs associated with labor and machines, their impacts on the total cost of production, and potential decisions businesses might make in response to union demands for higher wages. It suggests that firms may opt for more physical capital and less labor to increase labor productivity and control costs, especially when facing higher wage demands.