Suppose that you and a business partner have started a food truck venture specialising in curries. You buy a renovated food truck for $195,000 and have to pay a yearly license fee of $1,000 and insurance of $4,000. You estimate that the daily costs of labour will be $450; the cost of making a curry per serve is around $3.00 each and power costs are $50 per day.

a) Calculate the fixed costs of this business. If you use your combined savings to pay these costs, what is the estimated implicit cost in the first year of starting the business if the interest rate is 3% per year? (3 marks)

b) If you can make 500 curry serves per day calculate the variable cost of a single curry serve. (2 Marks)

c) What is the marginal cost?