Behavior of profit-maximizing firms

Reference no: EM1371661

Consider a firm which employs capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. As well suppose that total labor costs to the firm are $45,000 annually. Suppose further that the total capital stock of the firm is currently worth $100,000, that the return available to investors with comparable risks is 10 percent annually, and that there is no depreciation. Is this a profitable firm? Explain.

Reference no: EM1371661

Questions Cloud

Checking for optimal combination of inputs : A printer's wage rate is $20, and the price of a printing press is $5,000. The last printer added 20 books to total output, while the last press added 1,000 books to total output.

Political or cultural factors before employees work globally : What economic, political, and cultural factors do HR managers need to consider when sending employees to work internationally? What are the consequences if these factors are not addressed

Information about production function : Always Round Tire has a production function of Q = 300 L.75 K.5. In the short run, if L = 250 and K = 25, what happens to the output of tires if L jumps to 300 and then 350. What law does this illustrate?

Explain which of the following bases of product : Explain Which of the following bases of product differentiation attempts to create the perception that a firm's products or services are unusually valuable

Behavior of profit-maximizing firms : Consider a firm which employs capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. As well suppose that total labor costs to the firm are $45,000 annually.

Describe an ineffective electronic marketing text message : Describe an ineffective electronic marketing text message, email or pop-up ad you have received

Explain what federal agency would prosecute crime : Identify the crime and explain what federal agency would prosecute the crime - What punishments could be enforced and provide other real-life examples of people who have committed this crime.

Describe cost-volume-profit analysis : Describe cost-volume-profit analysis with profit-volume analysis and How do they differ

Example of resource allocation optimization : Find out the optimal crude oil allocation in the preceding example if the profit associated with fiber were cut in half, that is, fell to $0.375 per square foot.

User Account

All Pages