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A. Complete the table. A small firm operating in a purely competitive market, has fixed costs of $45 per day, compensate each employee $96 per day, and has daily output and raw material costs as indicated in the table below. b. If the company can sell every product it makes for $125 each, how many units should the company make each day? How many employees will it hire each day? What is the firm's MRP for the last month hired? Will the company make an economic profit producing this quantity of output? Why or why not?

Exploring Economics

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 6P

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A. Complete the table. A small firm operating in a purely competitive market, has fixed costs of $45 per day, compensate each employee $96 per day, and has daily output and raw material costs as indicated in the table below.

b. If the company can sell every product it makes for $125 each, how many units should the company make each day? How many employees will it hire each day? What is the firm's MRP for the last month hired? Will the company make an economic profit producing this quantity of output? Why or why not?

Marginal
Cost per
# of
Employees of
Units
Fixed Raw
Avg.
Avg.
Variable Total
Total
Total
Total
extra unit
costs Material Labor Variable Cost
Cost
of output
Output
costs
costs
costs
Cost
0.
$0
1
1
$35
$ 52
3.
$75
4.
4
$ 105
23
2.

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