ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers. Maintenance of the online platform for ordering meals costs the company $5/day. The company also rents spave where orders are prepared. Rent costs $50/day. To make the deliveries, the business also rents two delivery cars the cost $10/day. The costs of ingredients for preparing different numbers of meals are $50. Maria also has to hire between 0-10 workers to buy ingredients, prepare meals, and deliver the orders. She pays them $120/day. The first two columns of the table below shows how many meals different number of workers can prepare and deliver. 

Suppose that a minimum wage is introduced. To comply the new law, Maria has to start paying the workers $140/day. How many meals does the business have to deliver to earn the highest possible profit? Answer by filling out the table. 

Suppose that the price/meal Maria charges increases to $55. How many meals does the busness have to deliver to earn the highest possible profit?

Answer:
Max profit:
Workers Meals (Output
(Labor L)
Q)
0
1
2
3
4
5
6
7
10
0
30
42
52
60
67
73
79
85
90
66
95
MPL
FC
*
at
Cost of
ingredients
Q (#meals) =
VC
TC
AFC
AVC
ATC
MC
TR
Profit
Profit per
meal
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Transcribed Image Text:Answer: Max profit: Workers Meals (Output (Labor L) Q) 0 1 2 3 4 5 6 7 10 0 30 42 52 60 67 73 79 85 90 66 95 MPL FC * at Cost of ingredients Q (#meals) = VC TC AFC AVC ATC MC TR Profit Profit per meal
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