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A perfectly competitive firm produces digital devices using capital and labour. The wage rate is $16, the rental cost of capital is $16, and the
A perfectly competitive firm produces digital devices using capital and labour. The wage rate is $16, the rental cost of capital is $16, and the price of a digital device is $20. Suppose that the cost-minimising way to produce 20 digital devices is to use 4 units of labour and 4 units of capital. The total revenue from producing 20 digital devices is ______, the total cost of production is ______, and the profits of the firm are ______.
Which of the following, and why:
- 420, 134.4, 285.6
- 272, 400, -272
- 285.6, 420, -285.6
- 400, 128, 272
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