Answer the Question Based on the Following Information: Suppose 30

question 203

Multiple Choice

Answer the question based on the following information: Suppose 30 units of product A can be produced by employing just labor and capital in the four ways shown below. Assume the prices of labor and capital are $2 and $3, respectively. If the price of product A is $0.50, the firm will realize

• A)an economic profit of $4.
• B)an economic profit of $2.
• C)an economic profit of $6.
• D)a loss of $3.

---

Definitions:

MR

Marginal Revenue is the additional income generated from the sale of one more unit of a good or service.

Marginal Cost

The cost of producing one additional unit of a product, which varies depending on the level of production.

Marginal Revenue

The gain in revenue from disposing of one additional unit of a good or service.

Price Elasticity

An indicator of the responsiveness of the quantity of a product demanded to its price change, represented in terms of percentage variation.