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Question 1 Labor (workers) 1 2 3 4 5 6 7 Ovens Plant 1 Plant 2 (output) (output) 8 11 18 22 26 30 31
Question 1 Labor (workers) 1 2 3 4 5 6 7 Ovens Plant 1 Plant 2 (output) (output) 8 11 18 22 26 30 31 36 34 40 35 42 33 40 1 2 Tony hires workers at a wage rate of $50 a day and his total fixed cost is $100 for Plant 1 and $150 for Plant 2. a) He hires 2 workers and produces 18 pizzas per day. In which plant Tony's Pizza is technologically efficient? Can Tony increase production to 22 pizzas a day in the short run? If yes, how? b) Calculate Tony's Pizza's average total costs for Plant 1 and Plant 2. c) Draw the short-run average total cost curve for both plants
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