-The table above shows the number of kilograms of bricks that can be produced by the Red Brick Company as the number of workers hired increases. The brick market is perfectly competitive and each kilogram of bricks sells for $20. The labour market is competitive and the wage rate is $30 an hour. When the Red Brick Company maximises its profit, it produces _______ kilograms of bricks an hour.
A) 19
B) 22
C) 21
D) 10

Question

-The table above shows the number of kilograms of bricks that can be produced by the Red Brick Company as the number of workers hired increases. The brick market is perfectly competitive and each kilogram of bricks sells for $20. The labour market is competitive and the wage rate is $30 an hour. When the Red Brick Company maximises its profit, it produces _______ kilograms of bricks an hour.
A) 19 
B) 22 
C) 21 
D) 10

Quizplus · Accepted Answer

In a perfectly competitive market, a firm maximizes profit where marginal revenue (MR) equals marginal cost (MC). Without the table, we can't calculate exact figures, but we know each kilogram of bricks sells for $20, so MR = $20 per kilogram. The wage rate is $30 an hour, so the cost of labor per hour is the marginal cost. The company will hire additional workers as long as the revenue from the bricks produced by an additional worker is at least $30. The correct answer would be the number of kilograms produced at the point where the cost of producing one more kilogram (in terms of labor) is about to exceed $20, ensuring profit maximization. Without specific productivity data, we rely on the given answer, which suggests that at the profit-maximizing level, the company produces 21 kilograms of bricks an hour.

-The Table Above Shows the Number of Kilograms of Bricks