10. The Costs of Production

Donny Saltlife shapes surfboards in Hawaii. He leases two production machines, paying $300 each per week. He cannot increase the number of machines he leases in his contract. He can hire as many workers as he wants at a cost of $400 per week. These are his only two inputs to produce surfboards. Fill in the remaining columns in the table below.

A firm that sells headphones has the following average total cost schedule:The company currently produces and sells 600 units. A desperate customer calls and offers $550 for a pair of headphones. Should the company accept the offer?