Question

With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 10 units of labor, 7 units of land, 4 units of capital, and 3 units of entrepreneurial ability, selling at prices of $20, $60, $40, and $20, respectively. Assume the firm can sell these 400 loaves at $2 per unit.

a. What is the firm's total revenue?

Answer 1

The answer is: $800 per day

Step-by-step explanation:

Revenue refers to the income a firm has form its normal business activity, usually the sale of products or services.

In this case, the firm's total daily revenue is the income it gets form selling 400 loaves of bread at $2 per unit = 400 x $2 = $800 per day.