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2. The law of diminishing marginal returns Andrew's Performance Pizza is a small restaurant in Houston that sells gluten-free pizzas. Andrew's very tiny kitchen has
2. The law of diminishing marginal returns Andrew's Performance Pizza is a small restaurant in Houston that sells gluten-free pizzas. Andrew's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Andrew signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Andrew's kitchen cannot fit more than three ovens, Andrew cannot change the number of ovens he uses in his production of pizzas in the short run. However, Andrew's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Andrew lets them know how many workers he needs for each day of the week. In the short run, these workers are resources, and the ovens are resources. variable Andrew's daily production schedule is presented in the following table. fixed200 A 180 Production Function 180 140 120 100 QUANTITY OF OUTPUT (Pizzas) 80 40 20 2 3 4 0 LABOR HIRED (Number of workers)Suppose that labor is Andrew's only variable cost and that he has a xed Dost of $10 per dayr and pays each of his workers $50 per day. Use the orange points (square symbol) in plot Andrew's total cost curve on the following graph using the quantities from the preceding table. ('3 230 24o Total Cost TOTL COST (Dollars) D an 40 an somomnnowoisozno QUANTITY OF OUTPUT (Pizzas)
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