I figured out the fixed variable cost, however I can't understand how to do the bottom part. ### Pizzeria Cost InformationTo understand the cost structure of a pizzeria, let's analyze the following information provided:#### Cost Data Table| Quantity (Dozens of pizzas) | Total Cost (Dollars) | Variable Cost (Dollars) ||-----------------------------|----------------------|-------------------------|| 0 | 280 | 0 || 1 | 320 | 40 || 2 | 350 | 70 || 3 | 380 | 100 || 4 | 420 | 140 || 5 | 470 | 190 || 6 | 530 | 250 |#### Table Explanation:- **Quantity (Dozens of pizzas):** This column lists the number of dozen pizzas produced.- **Total Cost (Dollars):** This column lists the total cost incurred by the pizzeria for producing the corresponding quantity of pizzas.- **Variable Cost (Dollars):** This column lists the variable cost specifically associated with producing the respective quantity of pizzas. Variable costs are expenses that change in proportion to the production output.#### Fixed Cost:- **The pizzeria's fixed cost is $280**. This is the cost the pizzeria incurs regardless of the number of pizzas produced (e.g., rent, utilities, and salaries of permanent staff).By analyzing this data, we observe how both the total and variable costs change as the quantity of pizzas produced increases. This helps in understanding the cost behavior and in making informed decisions related to production planning and pricing strategies. ### Marginal Cost Calculation Exercise#### InstructionsComplete the third column of the following table by calculating the marginal cost per dozen pizzas using the information on total cost. Then complete the final column by calculating the marginal cost per dozen pizzas using the information on variable cost.#### Table of Costs| Quantity (Dozens of pizzas) | Total Cost (Dollars) | Marginal Cost Using Total Cost (Dollars) | Variable Cost (Dollars) | Marginal Cost Using Variable Cost (Dollars) ||-----------------------------|----------------------|---------------------------------------|------------------------|--------------------------------------------|| 0 | 280 | | 0 | || 1 | 320 | | 40 | || 2 | 350 | | 70 | || 3 | 380 | | 100 | || 4 | 420 | | 140 | || 5 | 470 | | 190 | || 6 | 530 | | 250 | |#### True or False QuestionIt doesn’t matter whether you compute marginal cost using total cost or variable cost.- [ ] True- [ ] False#### Explanation of Marginal CostMarginal cost is calculated as the change in total cost or variable cost when one more unit (in this case, one dozen pizzas) is produced. To fill out the table:1. *Marginal Cost Using Total Cost*: - Calculate the change in total cost when the quantity increases by one dozen pizzas.2. *Marginal Cost Using Variable Cost*: - Calculate the change in variable cost when the quantity increases by one dozen pizzas.For example:- To calculate the marginal cost between producing 0 and 1 dozen pizzas using total cost: $ \text{Marginal Cost} = \frac{\text{Total Cost at 1 dozen} - \text{Total Cost at 0 dozen}}{\text{Quantity produced}} $ $ \text{Marginal Cost} = \frac{320 - 280}{1} = 40 $- Similarly, use the variable cost change to find the marginal cost between producing 0 and 1 dozen pizzas using variable cost.Calculate these values for all the rows to complete the table.

The firm produces the goods and services with the inputs of production using labor and capital. The…

Quantity Total Cost Marginal Cost Using Total Cost (Dollars) Variable Cost Marginal Cost Using Variable Cost (Dollars) (Dozens of pizzas) (Dollars) (Dollars) 280 1 320 40 2 350 70 3 380 100 4 420 140 5 470 190 6 530 250 True or False: It doesn't matter whether you compute marginal cost using total cost or variable cost. True O False

Quantity Total Cost Marginal Cost Using Total Cost (Dollars) Variable Cost Marginal Cost Using Variable Cost (Dollars) (Dozens of pizzas) (Dollars) (Dollars) 280 1 320 40 2 350 70 3 380 100 4 420 140 5 470 190 6 530 250 True or False: It doesn't matter whether you compute marginal cost using total cost or variable cost. True O False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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