Anna’s grandfather, Conrad, owns a paper mill in a small industrial town. The factory produces one billion A4 sheets each year. Conrad is not the only paper producer on the market—but we’ll come back to that later. Conrad is wondering whether there are more cost-effective ways of producing paper. And for years, he has been thinking about expanding production and wants to know what it would cost—and whether it would be profitable. We’ll answer all these questions in this part of the book. But we begin with production technology: how people and machines can be combined to produce a given quantity of output—and how they should be combined to minimise costs. New technology makes it possible to automate the production process. Should Conrad invest in robots and reduce the need for labour to a minimum? In Chapter 6, we examine how to scale up production and what it costs, and in Chapter 7, whether it pays off.