(Table) The amount of labor and corresponding output are provided in the table. The price per unit of output is $11.50. The wage paid per day is $115. Assuming labor is the only cost of production, the wages paid per day are $115. The economic profit earned by this profit-maximizing firm is
$\begin{array}{|c|c|}
\hline \text { Labor } & \text { Output } \
\hline 0 & 0 \
\hline 1 & 7 \
\hline 2 & 19 \
\hline 3 & 34 \
\hline 4 & 47 \
\hline 5 & 57 \
\hline
\end{array}$

Question

Quizplus · Accepted Answer

The correct answer is A because the economic profit is calculated as the difference between total revenue and total cost. Total revenue is equal to the price per unit of output multiplied by the number of units of output. Total cost is equal to the wage paid per day multiplied by the number of days of production. In this case, the price per unit of output is $11.50, the wage paid per day is $115, and the number of units of output is 47. Therefore, total revenue is $11.50 * 47 = $540.50, and total cost is $115 * 1 = $115. Therefore, economic profit is $540.50 - $115 = $425.50.

(Table) the Amount of Labor and Corresponding Output Are Provided