Question

Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 12 workers, the store can sell 300 pounds of produce per day. If she hires 13 workers, the store can sell 370 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $80 per day. Assuming no changes in either the daily wages paid to store workers or the price at which the store sells its produce, what is the minimum number of sales that would allow the firm to increase its profits by hiring a 14th worker?

Answer 1

Answer:

The 14th worker will need to increase sales by 20 pounds  for a total of 390 pounds

Explanation:

The worker cost is $80

To make a profit the company will need sales for at least that amount:

$80 wages per day / $4 earnings per pound = 20 pounds

in total sales would need to be 370 + 20 = 390 pounds