Tony's Pizza's Production Function Is Shown in the Table Above

question 150

Essay

Tony's Pizza's production function is shown in the table above. Tony currently operates Plant 1. He hires workers at a wage rate of $50 a day and his total fixed cost is $100.
a) Calculate Tony's Pizza's total variable cost and total cost for each output level.
b) Calculate Tony's marginal costs.
c) Calculate the average fixed costs, average variable costs, and average total costs.
d) Draw Tony's marginal, average variable, and average total cost curves in one figure. What is the relationship between marginal cost and average cost?

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Definitions:

Vicariously Liable

The legal principle where one party is held liable for the actions of another party, such as an employer for the acts of its employees.

Mental Fault

A legal concept referring to the intentional or reckless state of mind of a defendant necessary for certain offenses or torts.

Hot Pursuit

A legal principle that allows law enforcement officers to cross jurisdictional lines in pursuit of a fleeing suspect.

Fourth Amendment

A provision of the U.S. Constitution that protects individuals against unreasonable searches and seizures by the government.