Question 1: Costs and Production
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 per day.
The company also rents space where orders are prepared. Rent costs $50 per day.
To make the deliveries, the business also rents two delivery cars that cost $10 each per day.
The costs of ingredients for preparing different numbers of meals are provided in the table below.
Maria also has to hire between 0 and 10 workers (depending on the number of meals she chooses to make) to buy ingredients, prepare meals, and deliver the orders.
She will pay each employee $120 per day .
The first two columns of the table below show how many meals different number of workers can prepare and deliver.
	Workers (Labor L)	Meals (Output Q)	MPL	FC	Cost of ingredients	VC	TC	AFC	AVC	ATC	MC	TR	Profit	Profit per meal
	0	0	-		$10
	1	30			$75
	2	42			$100
	3	52			$121
	4	60			$138
	5	67			$152
	6	73			$165
	7	79			$177
	8	85			$189
	9	90			$199
	10	95			$210
a) Use Excel Charts to graph this business' production function (relationship between L and Q).
Hint: Select the data that you would like to be included, and go to Insert/ Chart => All charts => Select "Line".
b) Use Excel functions to find the marginal product of labor (MPL) and enter it into the third column of the table.
Note: MPL = change in Q/ change in L
	Answer:	In the table above.
c) Graph MPL as a function of the number of workers Maria hires.
d) Use Excel functions to complete the table by calculating FC, VC, TC, MC, AFC, AVC, TR, Profit, and Profit per meal for each level of output (number of meals).
	Answer:	In the table above.
e) Suppose that Maria charges $50 per order and delivery.
What is the maximum profit Maria could earn? How many meals does the business have to deliver to earn the highest possible profit?
	Answer:	Max profit:			at	Q (#meals):
f) What is the shut-down price of Maria's business? Use Excel functions to answer the question.
	Answer:	Shut-down price:			(minimum of AVC)
g) What is the break-even price of Maria's business? Use Excel functions to answer the question.
	Answer:	Break-even price:			(minimum of ATC)