1. G&G Cat Food sells cans of cat food to customers. The quantity of output (cans of cat food) and the corresponding number of employees per hour in the following table: ATC: AG AFC AUC Employees/hr 1 2 3 4 p 5 6 Cans/hr 10 20 28 32 35 37 TC($) VC CL MC($/can) ATC($/can) AVC($/can) G&G Cat Food is a profit maximizing firm in a perfectly competitive market, and each employee earns $20 per hour. Fixed costs come from a 1-year contract for rents paid on the factory, and are the equivalent of $40 per hour. (a) Fill in the table above. (b) If the market price of cat food is $5 per can, how much cat food would G&G produce per hour? Calculate the hourly profits at this level of output. DOU (c) What output would be produced if process dell to $1.50 per can? What would profits be in the short run?

1. G&G Cat Food sells cans of cat food to customers. The quantity of output (cans of cat food) and the corresponding number of employees per hour in the following table: ATC: AG AFC AUC Employees/hr 1 2 3 4 p 5 6 Cans/hr 10 20 28 32 35 37 TC($) VC CL MC($/can) ATC($/can) AVC($/can) G&G Cat Food is a profit maximizing firm in a perfectly competitive market, and each employee earns $20 per hour. Fixed costs come from a 1-year contract for rents paid on the factory, and are the equivalent of $40 per hour. (a) Fill in the table above. (b) If the market price of cat food is $5 per can, how much cat food would G&G produce per hour? Calculate the hourly profits at this level of output. DOU (c) What output would be produced if process dell to $1.50 per can? What would profits be in the short run?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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solve the following: d. what is the marginal cost when the firm increases the output from 5 to 6? e. the economic profit is maximized at output equal to?
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