Ebba Kantzen says the following: "I am currently producing 10,000 pizzas per month at a total cost of $50,000. If I produce 10,001 pizzas, my total cost will rise to $50,011. Therefore, my marginal cost of producing pizzas must be increasing." 1.) Using the point drawing tool, indicate the point of marginal cost. Label this point "Marginal cost." 2.) Using the point drawing tool, indicate the point of average total cost. Label this point "Average total cost." Carefully follow the instructions above, and only draw the required objects.

Ebba Kantzen says the following: "I am currently producing 10,000 pizzas per month at a total cost of $50,000. If I produce 10,001 pizzas, my total cost will rise to $50,011. Therefore, my marginal cost of producing pizzas must be increasing." 1.) Using the point drawing tool, indicate the point of marginal cost. Label this point "Marginal cost." 2.) Using the point drawing tool, indicate the point of average total cost. Label this point "Average total cost." Carefully follow the instructions above, and only draw the required objects.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.

Question

Ebba Kantzen says the following:
"I am currently producing 10,000 pizzas per month at a total cost of $50,000. If I produce 10,001
pizzas, my total cost will rise to $50,011. Therefore, my marginal cost of producing pizzas must
be increasing."
(
1.) Using the point drawing tool, indicate the point of marginal cost. Label this point "Marginal
cost."
2.) Using the point drawing tool, indicate the point of average total cost. Label this point "Average
total cost."
Carefully follow the instructions above, and only draw the required objects.
Costs(dollars per pizza)
(5.95,0)
MC
Quantity (pizzas per month)
points
ATC

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