Assume that each day a firm uses 13 employee-hours per day and an office to produce 100 units of output. The price of each unit output is $5, the hourly wage rate is $10, and rent on the office is $200 per day. Each day the firm earns a ________ of ________.
A)profit; $370
B)loss; $200
C)profit; $170
D)loss; $170

Question

Quizplus · Accepted Answer

Revenue is $5 times 100, or $500. Total labor costs are $130 (= 13 ×$10)and rent is $200, so total costs are $330. Thus, profit is $500 - $330 = $170.

Assume That Each Day a Firm Uses 13 Employee-Hours Per