SSE 103 HW3 Student\'s Name: 2. You are thinking about setting up a lemonade sta
ID: 1118076 • Letter: S
Question
SSE 103 HW3 Student's Name: 2. You are thinking about setting up a lemonade stand. The stand itself costs $200. The ingredients for cach cup of lemonade cost $0.50. Due: homework assignments. Show necessary reasoning and caleulations that lead Type your to your answers. How much is your fixed cost of doing business? How much is your variable cost per cup? a. 1. Consider the following cost information for a pizzeria: b. Construct a table showing your total cost, average total cost, and marginal cost for output levels varying from 0 to 10 gallons. (Hint: There are 16 cups in a gallon) cost 3. Jane's Juice Bar has the following cost schedules: ty ariable cost cost a. How much is the pizzeria's fixed cost? a. Calculate average variable cost, average total cost, and marginal cost for each Put these numbers in the table below b. I Calculate the marginal cost per dozen pizzas using the information on total cost. II) Also, calculate the marginal cost per dozen pizzas using the information on variable cost. What is the relationship between these sets of numbers? Comment. ty erage variable cost Average total cost l cost cost b. Graph all three curves (average variable cost, average total cost and marginal cost) using Excel or a piece of grid paper. Attach the graph to this assignment. What is the relationship between the marginal-cost curve and the average total costurve? Between the marginal cost curve and the average variable cost curve? ExplainExplanation / Answer
Ans:
1)
a) Computation of fixed cost of pizzeria.
Total cost when 0 dozen pizzas are produced is $300.Hence the fixed cost is $300.
b) Table showing marginal cost per dozen pizzas using total cost and variable cost.
Marginal cost is the additional cost incurred for producing a additional unit of output.The relationship is that the change in total cost per unit and change in variable cost per unit is same.
Quantity Total cost Variable cost MC(I) MC(II) 0 $300 $0 0 0 1 $350 $50 $50 $50 2 $390 $90 $40 $40 3 $420 $120 $30 $30 4 $450 $150 $30 $30 5 $490 $190 $40 $40 6 $540 $240 $50 $50Related Questions
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