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Total Economic Profit

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Here is the Scenerio- Labor is only variable input. Output is 4000 unit Marginal Product of labor is 10 Average Product of labor is 50 Price of labor is $150 Marginal product of capital is 40 Average product of capital is 60 Price of capital is $240 Total Fixed Cost is $16000. Output is 4000. Have to find out MC, AVC, AFC, ATC and TOTAL ECONOMIC PROFIT. I posted that problem before but ot 103997 didn't give
Total full answer. The Second portion of the problem is- How should a Firm Adjust quantities of labor and Capital to maximize profit from producing 4000 unit of output? How do we decide the Adjustment? what can be said about the costs, if the adjustment in part a are complete?

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Solution Summary

This solution calculates the total economic profit. How a firm should adjust quantities of labor and capital to maximize profits from producing unit outputs are determined.

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The problem here is that the price of the product is not given, which is essential to calculate the TOTAL ECONOMIC PROFIT. However, I will provide you with the method and steps to calculate the profit, and you can finish the computation when the information is updated.
<br>If the market is perfectly competitive, the TOTAL ECONOMIC PROFIT should be 0 for all the ...

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