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/day. The company also rents spave where orders are prepared. Rent costs $50/day. To make the deliveries, the business also rents two delivery cars the cost $10/day. The costs of ingredients for preparing different numbers of meals are $50. Maria also has to hire between 0-10 workers to buy ingredients, prepare meals, and deliver the orders. She pays them $120/day. The first two columns of the table below shows how many meals different number of workers can prepare and deliver.  Suppose that the price of rent increases to $60/day. How many meals does the business have to deliver to earn the highest possible profit? Fill out the table as your answer.

Economics For Today
10th Edition
ISBN:9781337613040
Author:Tucker
Publisher:Tucker
Chapter11: Labor Markets
Section: Chapter Questions
Problem 1SQ
icon
Related questions
Question

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/day. The company also rents spave where orders are prepared. Rent costs $50/day. To make the deliveries, the business also rents two delivery cars the cost $10/day. The costs of ingredients for preparing different numbers of meals are $50. Maria also has to hire between 0-10 workers to buy ingredients, prepare meals, and deliver the orders. She pays them $120/day. The first two columns of the table below shows how many meals different number of workers can prepare and deliver. 

Suppose that the price of rent increases to $60/day. How many meals does the business have to deliver to earn the highest possible profit? Fill out the table as your answer.

Answer:
Max profit:
Workers Meals (Output
(Labor L)
Q)
0
1
2
3
4
5
67
6
8
9
10
0
30
42
52
60
67
73
79
85
90
95
MPL
FC
at
Cost of
ingredients
Q (#meals) =
VC
TC
AFC
AVC
ATC
MC
TR
Profit
Profit per
meal
Transcribed Image Text:Answer: Max profit: Workers Meals (Output (Labor L) Q) 0 1 2 3 4 5 67 6 8 9 10 0 30 42 52 60 67 73 79 85 90 95 MPL FC at Cost of ingredients Q (#meals) = VC TC AFC AVC ATC MC TR Profit Profit per meal
Expert Solution
steps

Step by step

Solved in 3 steps with 1 images

Blurred answer
Knowledge Booster
Marginal Product
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Economics For Today
Economics For Today
Economics
ISBN:
9781337613040
Author:
Tucker
Publisher:
Cengage Learning
Micro Economics For Today
Micro Economics For Today
Economics
ISBN:
9781337613064
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Survey Of Economics
Survey Of Economics
Economics
ISBN:
9781337111522
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Microeconomics
Microeconomics
Economics
ISBN:
9781337617406
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax