1.Use the table below to answer the following questions. Resource PricesABCLabor$5543Capital 10235Entrepreneur20111Assume that a firm finds its profits will be maximized when it produces 50 units of product W (i.e., “widgets”). Three techniques shown in the table above will produce exactly 50 widgets.Which technique is the least expensive way of producing a widget?Suppose the firm chooses the least-cost method of production. If widgets sell for $2 each, what is the total economic profit of the firm?

Technique A is least expensive way

Answered: 1.Use the table below to answer the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1.Use the table below to answer the following questions.

	Resource Prices	A	B	C
Labor	$5	5	4	3
Capital	10	2	3	5
Entrepreneur	20	1	1	1

Assume that a firm finds its profits will be maximized when it produces 50 units of product W (i.e., “widgets”). Three techniques shown in the table above will produce exactly 50 widgets.
Which technique is the least expensive way of producing a widget?
Suppose the firm chooses the least-cost method of production. If widgets sell for $2 each, what is the total economic profit of the firm?

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