**Labor and Output Analysis for Small Pizzeria**The table below illustrates the daily output for a small pizzeria based on the number of workers employed:| Labor (workers) | Output ||-----------------|--------|| 0 | 0 || 1 | 20 || 2 | 50 || 3 | 70 || 4 | 80 || 5 | 85 |**Scenario:**- Fixed costs: $40 - Labor cost: $20 per worker**Question:**Calculate the average total cost of producing 80 units of output.**Multiple Choice Options:**- $1.50 per unit- $2.25 per unit- $0.75 per unit- $0.25 per unit**Explanation:**To find the average total cost, you need to calculate both fixed and variable costs for producing 80 units.- **Fixed Costs**: $40- **Variable Costs**: 4 workers x $20/worker = $80**Total Cost for 80 Units**: $40 (fixed) + $80 (labor) = $120**Average Total Cost**: $120 / 80 units = $1.50 per unitThe correct answer is $1.50 per unit.

Labor (workers) Output 1 20 2 50 70 4 80 85 The table shows daily output for small pizzeria based on the number of workers hired. Suppose fixed costs are $40 and labor costs are $20 per worker. The average total cost of producing 80 units equals $1.50 per unit. $2.25 per unit. $0.75 per unit $0.25 per unit. O O O C

Labor (workers) Output 1 20 2 50 70 4 80 85 The table shows daily output for small pizzeria based on the number of workers hired. Suppose fixed costs are $40 and labor costs are $20 per worker. The average total cost of producing 80 units equals $1.50 per unit. $2.25 per unit. $0.75 per unit $0.25 per unit. O O O C

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Labor (workers) Output 1 20 50 3 70 4 80 85 The table shows daily output for small pizzeria based on the number of workers hired. Suppose fixed costs are $20 and labor costs are $40 per worker. The average total cost of producing 80 units equals $2.25 per unit. $0.25 per unit. $1.50 per unit. $0.75 per unit
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