Analysis labour cost is given the details.
A labour analyst once argued:
If you worked 2,000 hours last year at a wage of $10 per hour and capable to produced 10,000 units of output, your output per hour is 5 units - total output divided by total hours worked. If you average six units an hour this year, your productivity (output per hour) has increased twenty percent. Assuming the unit price is $7.50, the same as last year, and you still get paid $10 per hour, your employer's labour cost per unit has decreased from $2 to $1.67 per unit. He gets added profits on each unit, so he can afford to share extra profits with his workers.
The analyst's assertions may be correct - but only under specific circumstances. Illustrate what are these circumstances?