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13 October, 18:25

A cleaning company uses $10 of chemicals, $40 of labor, and $5 of misc. expenses for each house it cleans. After some quality complaints, the company has decided to increase its use of chemicals by 50%. By what percentage has multifactor productivity fallen?

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  1. 13 October, 18:32
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    8.3%

    Explanation:

    initial cost per house = $10 + $40 + $5 = $55 per house

    after the 50% increase in the use of chemicals = $15 + $40 + $5 = $60 per house

    new multifactor productivity = new cost of 1 clean house / old cost of one clean house = $55 / $60 = 0.917 or 91.7%

    so the change in multifactor productivity = 100% - 91.7% = 8.3%
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