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Silvio 's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the following
Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the following three costs: (1) cost of renting ovens, which is $100 per oven per week, (2) labor cost, $280 per worker per week (the worker would receive the full pay regardless of the number of hours they work), and (3) the opportunity cost of Silvio's entrepreneurship, $1,000 per week.Given only the above information what is the best estimate for Silvio's long-run average cost if the output is 100 pizzas per week?A) $8.40 B) $17.60C) $11.00D) $19.40Why is the answer C) $11.00 and not D) $19.40 ?
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