Question: Draw an isoquant-isocost line graph to illustrate the following situation: Jill Johnson can rent pizza ovens for $2,000 per week and hire workers for $1,000

Draw an isoquant-isocost line graph to illustrate the following situation: Jill Johnson can rent pizza ovens for $2,000 per week and hire workers for $1,000 per week. She can minimize the cost of producing 20,000 pizzas per week by using 5 ovens and 10 workers, at a total cost of $20,000. She can minimize the cost of producing 45,000 pizzas per week by using 10 ovens and 20 workers, at a total cost of $40,000. She can minimize the cost of producing 60,000 pizzas per week by using 15 ovens and 30 workers, at a total cost of $60,000. Draw Jill's long-run average cost curve and discuss its economies of scale and diseconomies of scale.

Step by Step Solution

3.47 Rating (173 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Jill Johnsons pizza restaurant exhibits economies of scale between 20000 and ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

1347-B-A-A-M-E(521).docx

120 KBs Word File

Students Have Also Explored These Related Micro Economics Questions!