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 6 units of labor, 8 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. Assume the firm can sell these 400 loaves at $2 per unit. Instructions: Enter your answers as whole numbers. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. What is the firm's total revenue

Answer 1

Total revenue= -$60

Step-by-step explanation:

First, we need to determine the total cost of producing 400 loaves:

Total cost= 6*40 + 8*60 + 2*60 + 1*20

Total cost= $860

Now, we can calculate the total revenue:

Total revenue= total income - total cost

Total revenue= 400*2 - 860

Total revenue= -$60