The following table illustrates alternative production techniques for producing 18 widgets that can be sold for $1 each for a total revenue of $18. Refer to the above table. At the $3 price for labor the most efficient technique will result in an:
A) Economic loss of $2
B) Economic profit of $l
C) Economic profit of $2
D) Economic profit of $3

Question

The following table illustrates alternative production techniques for producing 18 widgets that can be sold for $1 each for a total revenue of $18.  Refer to the above table. At the $3 price for labor the most efficient technique will result in an:
A) Economic loss of $2 
B) Economic profit of $l 
C) Economic profit of $2 
D) Economic profit of $3

Quizplus · Accepted Answer

The most efficient technique when labor costs $3 is Technique 2, which has a total cost of $16 and a total revenue of $18, resulting in an economic profit of $2. Therefore, the best choice is to use Technique 2 to produce the 18 widgets.

The Following Table Illustrates Alternative Production Techniques for Producing 18