sume that a firm can produce product A, product B, or product C with the resources it currently ys. These resources cost the firm a total of $30 per week. Assume, for the purposes of this em, that the firm's costs cannot be changed. The market prices and the quantities of A, B, and C resources can produce are given below. Note: PROFIT AND REVENUE ARE DIFFERENT. Product Market price (P) Output (Q) Revenue (TR) Cost (TC) Profit А $5.00 8 30 $. 4.00 20 30 1.50 50 30 Compute the firm’s profit when it produces A, B, or C and enter these data in the table. Profit = Total Revenue (TR) –Total Cost (TC) = TR – TC TR = P *Q = per unit price of output * Quantity of output e.g., Product A: Revenue (TR) = $ ; Cost (TC) = $ ; so, Profit = $. %3D Which product will the firm produce? Firm will produce product _(A, B, or C ) that generates highest profit.

sume that a firm can produce product A, product B, or product C with the resources it currently ys. These resources cost the firm a total of $30 per week. Assume, for the purposes of this em, that the firm's costs cannot be changed. The market prices and the quantities of A, B, and C resources can produce are given below. Note: PROFIT AND REVENUE ARE DIFFERENT. Product Market price (P) Output (Q) Revenue (TR) Cost (TC) Profit А $5.00 8 30 $. 4.00 20 30 1.50 50 30 Compute the firm’s profit when it produces A, B, or C and enter these data in the table. Profit = Total Revenue (TR) –Total Cost (TC) = TR – TC TR = P Q = per unit price of output Quantity of output e.g., Product A: Revenue (TR) = $ ; Cost (TC) = $ ; so, Profit = $. %3D Which product will the firm produce? Firm will produce product _(A, B, or C ) that generates highest profit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above. I would like questions i,ii,iii answered please.
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At price UA, economic profits are: PRICE A B D E 0 O COFM ABJG Ο ΑΒΚΗ ACMG OABLI Marginal Cost M F H K Average Total Cost Average Variable Cost OUTPUT PER YEAR