Refer to the above information.Production Techniques:IIIIIIVLabor45nСapital31Answer the next two questions on the basis of the following information: Suppose30 units of product A can be produced by employing just labor and capital in the fourways shown below. Assume the prices of labor and capital are $3 and $4respectively. If the price of product A is $1.00, the firm will realize:1)an economic profit of $4.2)an economic profit of $10.3)an economic profit of $11.4) a loss of $4.

Profit=Total revenue-Total costNow,Total revenue=quantity*priceTR=30*1TR=$30

Answered: Refer to the above information.…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.2P

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