Assume that each day a firm uses 13 employee-hours 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 ______.

Question

Quizplus · Accepted Answer

Total cost per day = (13 employee-hours * $10 per hour) + $200 rent = $330

Total revenue per day = 100 units * $5 per unit = $500

Profit per day = Total revenue - Total cost = $500 - $330 = $170

Therefore, the firm earns a profit of $170 per day.

Assume That Each Day a Firm Uses 13 Employee-Hours and an Office