Marge Costa Produces Plastic Dog Dishes Using a Process That

Marge Costa produces plastic dog dishes using a process that requires only labor and plastic as inputs and has constant returns to scale.With the process she is currently using, a laborer can turn out 30 dog dishes an hour.The wage rate is $9 per hour.The plastic in a dog dish costs Marge $.10.She has no other costs besides labor and plastic.Marge faces a perfectly competitive market for plastic dog dishes, and she decides that she is maximizing profits when she makes 300 dog dishes an hour.What is the market price of dog dishes?

A) $.21
B) $.32
C) $.40
D) $.27
E) $.28

Correct Answer:

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