Assume That a Firm Can Produce Product A, Product B

question 22

Essay

Assume that a firm can produce product A, product B, or product C with the resources it currently employs.These resources cost the firm a total of $100 per week, this cost is per resource.Assume, for the purposes of this problem, that the firm's costs cannot be changed.The market prices and the quantities of A, B, and C these resources can produce are given as follows.
(a) Compute the firm's profit when it produces A, B, or C and enter these data in the table.
(b) Which product will the firm produce?
(c) If the price of A rose to $16, which product will the firm produce?
(d) If the firm produces A at a price of $16, what would tend to happen to the number of firms producing product A?

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Definitions:

Consideration

The exchange of something of value in return for the promise or service of another party, a fundamental component of a valid contract.

Promise

A declaration or assurance by one party to another that a particular action or condition will occur or be met, potentially forming the basis of a contractual obligation.

Consideration

Something of value that is promised, given, or done that persuades a party to enter into a contract, making the contract legally enforceable.

Contract

A legally binding agreement between two or more parties that is enforceable by law.