A pizzeria, which operates in a perfectly competitive hospitality market, can produce pizzas if it hasits premises and a pizza oven (which cost £10 per night), ingredients (£3 per pizza), and workers(each of whom earn £40 per night). The number of pizzas that can be produced per night, dependingon the number of workers employed by the pizzeria, is given in the following table:Workers employed 1 2 3 45Pizzas per night20 36 48 56 60HINT: In the following, you willI be asked to draw curves in diagrams based on the above table. Ineach diagram, please proceed as follows: First, place a dot in the diagram, each representing acolumn in the table. Second, label each dot with its coordinates. Third, connect dots with straightlines to obtain the required curve.c) Draw the total cost function.d) Explain how the firm can use this cost function to determine its profit maximising quantity.

Given; Cost of premise and oven= £10 per night Cost of ingredient= £3 per pizza Workers= £40 per…

A pizzeria, which operates in a perfectly competitive hospitality market, can produce pizzas if it has its premises and a pizza oven (which cost £10 per night), ingredients (£3 per pizza), and workers (each of whom earn £40 per night). The number of pizzas that can be produced per night, depending on the number of workers employed by the pizzeria, is given in the following table: Workers employed 1 2 3 4 5 Pizzas per night 20 36 48 56 60 HINT: In the following, you will be asked to draw curves in diagrams based on the above table. In each diagram, please proceed as follows: First, place a dot in the diagram, each representing a column in the table. Second, label each dot with its coordinates. Third, connect dots with straight lines to obtain the required curve. c) Draw the total cost function. d) Explain how the firm can use this cost function to determine its profit maximising quantity.

A pizzeria, which operates in a perfectly competitive hospitality market, can produce pizzas if it has its premises and a pizza oven (which cost £10 per night), ingredients (£3 per pizza), and workers (each of whom earn £40 per night). The number of pizzas that can be produced per night, depending on the number of workers employed by the pizzeria, is given in the following table: Workers employed 1 2 3 4 5 Pizzas per night 20 36 48 56 60 HINT: In the following, you will be asked to draw curves in diagrams based on the above table. In each diagram, please proceed as follows: First, place a dot in the diagram, each representing a column in the table. Second, label each dot with its coordinates. Third, connect dots with straight lines to obtain the required curve. c) Draw the total cost function. d) Explain how the firm can use this cost function to determine its profit maximising quantity.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A10
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