Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers. Maintenance of the online platform for ordering meals costs the company $5 per day. The company also rents space where orders are prepared. Rent costs $50 per day. To make the deliveries, the business also rents two delivery cars that cost $10 each per day. The costs of ingredients for preparing different numbers of meals are provided in the table below. Maria also has to hire between 0 and 10 workers (depending on the number of meals she chooses to make) to buy ingredients, prepare meals, and deliver the orders. She will pay each employee $120 per day. The first two columns of the table below show how many meals different number of workers can prepare and deliver. Price per meal $50 Workers Meals (Output (Labor L) Q) 0 1 2 3 4 5 0 30 42 52 60 67 6 7 8 9 MPL FC Cost of ingredients $10 $75 $100 $121 $138 $152 $165 $177 $189 $199 $210 VC TC AFC 73 79 85 90 10 95 a) Use Excel Charts to graph this business' production function (relationship between L and Q). Hint: Select the data that you would like to be included, and go to Insert/ Chart => All charts => Select "Line". AVC ATC MC TR Profit Profit per meal
Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers. Maintenance of the online platform for ordering meals costs the company $5 per day. The company also rents space where orders are prepared. Rent costs $50 per day. To make the deliveries, the business also rents two delivery cars that cost $10 each per day. The costs of ingredients for preparing different numbers of meals are provided in the table below. Maria also has to hire between 0 and 10 workers (depending on the number of meals she chooses to make) to buy ingredients, prepare meals, and deliver the orders. She will pay each employee $120 per day. The first two columns of the table below show how many meals different number of workers can prepare and deliver. Price per meal $50 Workers Meals (Output (Labor L) Q) 0 1 2 3 4 5 0 30 42 52 60 67 6 7 8 9 MPL FC Cost of ingredients $10 $75 $100 $121 $138 $152 $165 $177 $189 $199 $210 VC TC AFC 73 79 85 90 10 95 a) Use Excel Charts to graph this business' production function (relationship between L and Q). Hint: Select the data that you would like to be included, and go to Insert/ Chart => All charts => Select "Line". AVC ATC MC TR Profit Profit per meal
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers.
**Operational Costs:**
- Maintenance of the online platform for ordering meals costs the company $5 per day.
- The company also rents space where orders are prepared. Rent costs $50 per day.
- To make the deliveries, the business also rents two delivery cars that cost $10 each per day.
**Labor and Production:**
Maria has to hire between 0 and 10 workers (depending on the number of meals she chooses to make) to buy ingredients, prepare meals, and deliver the orders. She will pay each employee $120 per day.
The first two columns of the table below show how many meals a different number of workers can prepare and deliver.
| Price per meal | $50 | | | | | | | | | | |
|----------------|-----|--|--|--|--|--|--|--|--|--|--|
| Workers (Labor L) | Meals (Output Q) | MPL | FC | Cost of ingredients | VC | TC | AFC | AVC | ATC | MC | TR | Profit | Profit per meal |
|-------------------|------------------|-----|----|---------------------|----|----|-----|-----|-----|----|----|-------|-----------------|
| 0 | 0 | - | | $10 | | | | | | | | | |
| 1 | 30 | | | $75 | | | | | | | | | |
| 2 | 42 | | | $100 | | | | | | | | | |
| 3 | 52 | | | $121 | | | | | | | | | |
| 4 | 60 | | | $138 | | | | | | | | | |
| 5 | 67 | | | $152 | | | | | |
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