# With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of \$ 40, \$60, \$60, and \$20, respectively. Assume the firm can sell these 400 loaves at \$ 2 per unit. 1). What is its total revenue?2). What is its total cost?3).  What is the firm's profit or loss? The firm generates an economic ( choose one -a) loss, b) profit ) of...? 4). Will it continue to produce banana bread? ( Yes or No) 5). If this firm's situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?

Question

With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of \$ 40, \$60, \$60, and \$20, respectively. Assume the firm can sell these 400 loaves at \$ 2 per unit.

1). What is its total revenue?

2). What is its total cost?

3).  What is the firm's profit or loss? The firm generates an economic ( choose one -a) loss, b) profit ) of...?

4). Will it continue to produce banana bread? ( Yes or No)

5). If this firm's situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?

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