13. Suppose Becky is starting a grocery delivery company, which takes grocery orders from customers, goes to the grocery store, buys groceries, and delivers them to the customers' homes. Employees will receive orders from customers on a cell phone for which she pays $5 per day for the service. To make deliveries to customers, she will rent a delivery van which seats 2 people for $75 per day. She plans on hiring between 1 and 6 employees to take the orders, do the grocery shopping and make the deliveries. She will pay each worker $100 per day in wages. The following is the business' production function: Labor 1 2 3 4 5 6 Output Marginal Variable Total (Total Product Cost Cost Product) 0 4 9 13 16 18 19 Based on the table above, at what price will the competitive firms profits exactly equal zero? a. $21.11 b. $22.22 Average Average Marginal Variable Total Cost Cost Cost c. $25 d. $29.23 e. None of the above.

13. Suppose Becky is starting a grocery delivery company, which takes grocery orders from customers, goes to the grocery store, buys groceries, and delivers them to the customers' homes. Employees will receive orders from customers on a cell phone for which she pays $5 per day for the service. To make deliveries to customers, she will rent a delivery van which seats 2 people for $75 per day. She plans on hiring between 1 and 6 employees to take the orders, do the grocery shopping and make the deliveries. She will pay each worker $100 per day in wages. The following is the business' production function: Labor 1 2 3 4 5 6 Output Marginal Variable Total (Total Product Cost Cost Product) 0 4 9 13 16 18 19 Based on the table above, at what price will the competitive firms profits exactly equal zero? a. $21.11 b. $22.22 Average Average Marginal Variable Total Cost Cost Cost c. $25 d. $29.23 e. None of the above.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter20: Consumer Choice And Elasticity

Section: Chapter Questions

Problem 2CQ

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