nts per question)1a0od it produces is constant, than itNAME:NT A QUIZABC Limited sells its product in a perfectly competitive market for a price of $151.perunit and hires workers at a daily wage of $75. Labor is the only factor cost, and the firm iscurrently earning profits. If ABC hires one more worker and output increases by 5 unitsperday, the firm's profits willa. decrease by $5b. decrease by $75c. increase by $75d. increase by $15e. remain unchanged.

The correct answer to the above-mentioned question is option (e).

Answered: nts per question) 1a0od it produces is…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 15P

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Similar questions

What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?
How does fixed cost affect marginal cost? Why is this relationship important?
Are fixed costs also sunk costs? Explain.
What is the marginal cost of labor?
0 Labo capit total Labors ur al product $20 FC 5 15 1 10 1 1 1 20 1 Question 6 Mr-Ali Alawi recently set a shoe manufacturing outlet. He is planning for production demand, labor requirement, fixed cost, variable cost, the revenue. He come up with the following schedule. Help him to fill up the schedule. Initially he plans to use one machine. Total fixed cost per month is expected to be $1000. The unit cost of labor is estimated to be $20. 0 25 75 100 VC=# of 150 0 100 200 300 1000 total Cost(FC+VATotal cost/ C) 100 1000 120 1000 140 1000 160 Marginal cost(MC) 400 1000 180 ATotal Product Total Revenue Profit
Charlie Co. sells pastries and its production and cost table is given below. A workercosts $100 a day, the firm has fixed costs of $200.L Q MP MC TC ATC0 01 202 503 904 1205 1406 1507 155a. Complete the table above b. Compare the average total cost and the marginal cost and explain therelationship c. Describe the methods that can be used to determine where profit is maximized?
A VWQ6 Q9 B Unanswered The table below shows the total product from different levels of labor. Suppose the hourly wage rate for labor is $30 per hour. What is the Total Variable Cost of producing 50 units? $30 $1,500 C $60 D $2 Units of Labor (hours) 0 1 2 3 4 Total Product X 0 20 50 80 100 pure water, perfect te
Consider a small business that makes pastries. The business has rented a building to be used as its factory and shop floor. The rent of the building is $2,000 per week. The rest of the firm's weekly costs are as follows: ●Income lost from alternative employment - $2,000 ●Explicit variable costs - $1,500 ●Implicit variable costs - $ 500 i. If the firm sells 1,000 pastries per week, at $6 per pastry, calculate the firm's weekly ●Accounting profit, and ●Economic profit ii. Based on your answer to part b. i. above, should the firm continue to operate? Why or why not? iii. Assume that the firm continues at the current output level of 1,000 pastries per week while the prices start to fall. The firm should consider 'shut-down' if the price falls below what dollar value? Explain using relevant calculations and concepts
A television production firm is able to produce TVs according to the short-run production table below. With the hiring of which worker would the diminishing marginal product begin? Total Output Number of of Televisions Workers per day 0 0 30 2 70 3 125 185 225 250 260 255 240 01 4 5 6789
Coldbox Corporation hires its workers in a perfectly competitive labor market and produces and sells frozen peas in a perfectly competitive product market. The market price for frozen peas is $4 per bag. The table below shows Coldbox' short-run production of frozen peas. Labor is the only variable input. Coldbox Corporation's fixed cost is $500. Number of Workers Bags of frozen peas 0 0 1 60 2 140 3 250 4 320 5 380 6 400 a) If the wage is $200 per worker, identify the profit-maximizing number of workers for Coldbox. Explain using marginal analysis. b) If the price of frozen peas decreases by $2 per bag, would the number of workers hired by Coldbox be more than, less than, or equal to the number of workers you identified in part (a) ? Explain. c) Suppose that Coldbox hires workers from a monopsonistic labor market. Would the wage be higher, lower, or equal to the equilibrium wage in a perfectly competitive market? Explain.
b. Five Sales Executives have been told by their company Heavy Machines Limited (HML) that eachsales executive, will be relocated to work at one of five branches of their company, in theCaribbean. The cost to relocate a sales executive at each of the five branches is shown in Table 8below: SalesExecutiveBranchJamaica Antigua/Barbuda Trinidad&TobagoBarbados St. LuciaZenk Murt $2,550 $2,300 $ 2,700 $2,300 $2,400Rangle Tang $2,400 $2,700 $2,800 $2,600 $2,400Atil Heglam $2,600 $2,400 $2,700 $2,500 $2,400Justop Brelim $2,400 $2,500 $3,000 $2,400 $2,500Mesk Lathim $2,400 $2,300 $2,500 $2,800 $2,700 The costs shown in Table 8, are in Eastern Caribbean (EC) dollars. (i) Determine the optimal relocation of the five Sales Executives.
In theory - firms are suppose to hir labor up the the point where the marginal revenue product equals the marinal factor cost. Explain what this means.

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