With current technology, suppose a firm is producing 400 loaves of banana bread daily. Also assume that the least-cost combination of resources in producing those loaves is 6 units of labor, 8 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. Assume the firm can sell these 400 loaves at $2 per unit.
Instructions: Enter your answers as whole numbers. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.
a. What is the firm's total revenue? $.
b. What is its total cost? $.
c. Calculate the amount of economic profit or loss. $.
d. Will it continue to produce banana bread? (Click to select)Yes No.
e. If this firm’s situation is typical for the other makers of banana bread, will resources flow toward or away from this bakery good?