Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week.Suppose Silvio's uses Plant 2. What is the marginal cost of producing the 200th pizza?A. $7.00B. $10.55C. $4.40D. $5.09 LaborOutput with Plant 1 (1 Output with Plant 2 (2(workers peroven)ovens)week)(pizzas per week)(pizzas per week)1506080130310018041102205115240Silvio's Pizza is a small pizzeria. The firm's production function isshown in the table above. Suppose that Silvio's costs includeonly the cost of renting ovens, which is $100 per oven per week,the labor cost, $280 per worker per week, and the opportunitycost of Silvio's entrepreneurship, $1,000 per week.Suppose Silvio's uses Plant 2. What is the marginal cost ofproducing the 200th pizza?$7.00$10.55$4.40$5.09

The marginal cost is the change in total cost divided by the change in the total output. Therefore,…

Answered: Silvio's Pizza is a small pizzeria. The…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week.

Suppose Silvio's uses Plant 2. What is the marginal cost of producing the 200th pizza?

A. $7.00

B. $10.55

C. $4.40

D. $5.09

Labor
Output with Plant 1 (1 Output with Plant 2 (2
(workers per
oven)
ovens)
week)
(pizzas per week)
(pizzas per week)
1
50
60
80
130
3
100
180
4
110
220
5
115
240
Silvio's Pizza is a small pizzeria. The firm's production function is
shown in the table above. Suppose that Silvio's costs include
only the cost of renting ovens, which is $100 per oven per week,
the labor cost, $280 per worker per week, and the opportunity
cost of Silvio's entrepreneurship, $1,000 per week.
Suppose Silvio's uses Plant 2. What is the marginal cost of
producing the 200th pizza?
$7.00
$10.55
$4.40
$5.09

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