Table below provides production data for Peg's Pie Shop, indicating the output per day with different numbers of employees. The shop sells its pies and hires its labor in perfectly competitive markets. Currently, the equilibrium price of a pie is $5, and the equilibrium wage rate is $80 per day. If the total fixed costs are equal $100 and labor is the only variable input and this firm hires the profit-maximizing number of workers, it will earn profit equal to Labor (#workers) 0 1 2 3 4 5 Pies per day 0 20 60 90 110 120
Table below provides production data for Peg's Pie Shop, indicating the output per day with different numbers of employees. The shop sells its pies and hires its labor in perfectly competitive markets. Currently, the equilibrium price of a pie is $5, and the equilibrium wage rate is $80 per day. If the total fixed costs are equal $100 and labor is the only variable input and this firm hires the profit-maximizing number of workers, it will earn profit equal to Labor (#workers) 0 1 2 3 4 5 Pies per day 0 20 60 90 110 120
Chapter12: The Partial Equilibrium Competitive Model
Section: Chapter Questions
Problem 12.2P
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![Table below provides production data for Peg's Pie Shop, indicating the output per day with
different numbers of employees. The shop sells its pies and hires its labor in perfectly competitive
markets. Currently, the equilibrium price of a pie is $5, and the equilibrium wage rate is $80 per
day. If the total fixed costs are equal $100 and labor is the only variable input and this firm hires
the profit-maximizing number of workers, it will earn profit equal to
Labor (#workers)
O $40
O $70
O $230
O $130
0
1
2
3
4
5
Pies per day
0
20
60
90
110
120](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fedfdfe60-4792-4dfe-9201-7df017f01b3d%2F497b98f7-4603-4c15-b7e7-2e1db2329a23%2F88zm24_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Table below provides production data for Peg's Pie Shop, indicating the output per day with
different numbers of employees. The shop sells its pies and hires its labor in perfectly competitive
markets. Currently, the equilibrium price of a pie is $5, and the equilibrium wage rate is $80 per
day. If the total fixed costs are equal $100 and labor is the only variable input and this firm hires
the profit-maximizing number of workers, it will earn profit equal to
Labor (#workers)
O $40
O $70
O $230
O $130
0
1
2
3
4
5
Pies per day
0
20
60
90
110
120
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