1 answer

ILUIldl Total Cost Output 0 $3.00 1 2 3 3.30 3.80 4.50 5.40 6.50 7.80 9.30...

Question:

ILUIldl Total Cost Output 0 $3.00 1 2 3 3.30 3.80 4.50 5.40 6.50 7.80 9.30 11.00 12.90 15.00 1. Tonys Pizzas production fun

ILUIldl Total Cost Output 0 $3.00 1 2 3 3.30 3.80 4.50 5.40 6.50 7.80 9.30 11.00 12.90 15.00 1. Tony's Pizza's production function is shown in the table beside. a) Calculate Tony's Pizza's total variable cost and total cost for each output level. b) Calculate the marginal costs. c) Calculate the average fixed costs, average variable costs, and average total costs. d) Suppose that total fixed cost increases to $5. Explain what changes occur in the costs 6 7 8 10

Answers

3 0.3 Output Total cost FC VC Marginal cost AFC AVC 3 30 #DIV/0! 3.3 3 0 .3 30.3 2 3. 8 3 0.8 0.5 1.5 0.4 3 4.5 3 1 .5 0.7 1FC=3, at 0 quantity total cost is 3. So it will be fixed cost. It doesn't change with the output.

VC =TC-FC.

Marginal cost = change in total cost / change in output

AVC=VC /Q

Afc=FC/Q

D. Suppose that fixed cost increase to 5.

VC AFC AVC Output 0 1 2 3 - 4 5 6 7 8 9 10 co voor Awn TC FC 5 5 5.3 5 5.8 5 6.5 5 7.4 5 8.5 5 9.8 5 11.3 5 13 5 14.9 5 17 5

.

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