Answers to Economic Growth
1. The firm should hire 7 workers.
2. The firm's greatest profit is $96.50
3. The breakeven formula is Total FC/ (Selling Price- Variable Cost)
Therefore FC $7.00/($4.00-$2.50)= The firm needs to sell 4.6666667 hamburgers to break-even. (Zero Profit)
| Practice | Per Hour | $ 2.50 | |||||||
| # of Workers | Quantity of Burgers | Marginal Productivity | Price | Total Revenue | Wage | VC | TC | FC | Profit |
| 0 | 0 | 0 | $4.00 | $0.00 | $ 6.00 | $ - | $ 7.00 | $ 1.00 | $ (7.00) |
| 1 | 5 | 5 | $4.00 | $20.00 | $ 6.00 | $ 12.50 | $ 19.50 | $ 1.00 | $ 0.50 |
| 2 | 15 | 10 | $4.00 | $60.00 | $ 6.00 | $ 37.50 | $ 44.50 | $ 1.00 | $ 15.50 |
| 3 | 26 | 11 | $4.00 | $104.00 | $ 6.00 | $ 65.00 | $ 72.00 | $ 1.00 | $ 32.00 |
| 4 | 38 | 12 | $4.00 | $152.00 | $ 6.00 | $ 95.00 | $ 102.00 | $ 1.00 | $ 50.00 |
| 5 | 51 | 13 | $4.00 | $204.00 | $ 6.00 | $ 127.50 | $ 134.50 | $ 1.00 | $ 69.50 |
| 6 | 67 | 16 | $4.00 | $268.00 | $ 6.00 | $ 167.50 | $ 174.50 | $ 1.00 | $ 93.50 |
| 7 | 69 | 2 | $4.00 | $276.00 | $ 6.00 | $ 172.50 | $ 179.50 | $ 1.00 | $ 96.50 |
| 8 | 3 | -66 | $4.00 | $12.00 | $ 6.00 | $ 7.50 | $ 14.50 | $ 1.00 | $ (2.50) |
| 9 | -5 | -8 | $4.00 | ($20.00) | $ 6.00 | $ (12.50) | $ (5.50) | $ 1.00 | $ (14.50) |
| 10 | -18 | -13 | $4.00 | ($72.00) | $ 6.00 | $ (45.00) | $ (38.00) | $ 1.00 | $ (34.00) |
In conclusion if the firm wants to hire an additional worker, there going to have to invest in capital to do so.