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    pineapple98's Avatar
    pineapple98 Posts: 2, Reputation: 1
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    #1

    Jan 15, 2009, 07:42 AM
    The firm currently uses 50,000 workers to produce 200,000 units of output per day. Th
    The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage (per worker) is $80, and the price of the firm’s output is $25. The cost of other variable inputs is $400,000 per day. Although you don’t know the firm’s fixed cost, you know that it is high enough that the firm’s total costs exceed its total revenue.


    All help is appreciated.
    proteas's Avatar
    proteas Posts: 26, Reputation: 3
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    Feb 9, 2009, 06:07 AM

    In your problem, the per widget contribution margin is $3. If your fixed cost / widget is greater than that then, yes, they are loss making.

    However, not clear on what is really your question?
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