ECON 1900 Study Guide - Margarine, Demand Curve, Canadian Tire
Document Summary
From the text, end of chapter 2, questions 8 and 9 s. 2-8 (key question) 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 5 units of labour, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of , The firm will continue to produce as it is earning economic profits of (total revenue of minus total cost of ). If this firm is typical, more resources will flow toward banana bread as other potential firms are attracted to the economic profits. 2-9 (key question) some large hardware stores such as canadian tire boast of carrying as many as 20,000 different products in each store. The quest for profit led firms to produce these goods. Producers looked for and found the least- cost combination of resources in producing their output.
