Question

Sams Performance Pizza is a small restaurant in San Diego that sells gluten-free pizzas. Sams very tiny kitchen has barelyOn the following graph, plot Sams production function using the green points (triangle symbol). Note: Plot your points in thSuppose that labor is Sams only variable cost and that he has a fixed cost of $30 per day and pays each of his workers $30 pThe law of diminishing marginal product of labor is demonstrated by which of the following? O Total output increases only whe

0 0
Add a comment Improve this question Transcribed image text
✔ Recommended Answer
Answer #1

In the short run these workers are variable inputs, and the ovens are fixed inputs.

labor Output marginal product of labor
0 0
1 50 50
2 90 40
3 120 30
4 140 20
5 150 10

Marginal product of labor = (change in output / change in labor)

Production function. Quantity of Output (Pizzas) 56 2 3 labor (number of workers)

labor Output Fixed cost Variable cost Total cost
0 0 30 0 30
1 50 30 30 60
2 90 30 60 90
3 120 30 90 120
4 140 30 120 150
5 150 30 150 180

Fixed cost =$30 and it remains same at each level of output.

Variable cost = Wage rate * No. of labor

Variable cost = $30 * No of labor

Total Cost = Fixed cost + Variable cost.

Total cost ($ 0 20 40 120 140 160 60 80 100 Quantity of output (Pizzas) Total cost

The law of diminishing marginal product of labor implies an increase in total output at a decreasing rate as the number of labor increases.

Answer; Option (C)

Add a comment
Know the answer?
Add Answer to:
Sam's Performance Pizza is a small restaurant in San Diego that sells gluten-free pizzas. Sam's very...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT