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Your firm specializes in recycling used plastics into consumer goods. You have three production opportunities: 1. You can produce plastic utensils for a revenue of

Your firm specializes in recycling used plastics into consumer goods. You have three production opportunities:

1. You can produce plastic utensils for a revenue of $30,000 while production will cost $15,000.

2. Alternatively, you can produce lampshades: you calculate that at the optimal production, you expect to sell 2,000 lampshades every year at $10 each, and your average total cost per lampshade will be $2.

3. You also have the option to shut down your factory and produce nothing at a cost of $1,000 a year.

Which opportunity do you choose?

You produce plastic utensils

You produce lampshades

You shut down

What is your accounting and economic profit?

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