Tutorial 7 1. Pat's pizza restaurant is a price taker. It has the following total cost schedule. Output Total cost a) What is Pat's profit maximizing output and how (pizza (dollars much profit does Pat make if the market price is per hour) per hour) i) $14 a pizza, 10 ii) $12 a pizza, and 21 iii) $10 a pizza. 30 UIAWN 41 b) Drive Pat's supply curve. 54 69 Answers: a) i) When price = Output Price Total Marginal Total Cost Marginal Profit/Loss (pizza/hour) Revenue Revenue (dollars/hour) Cost 0 $14 10 $14 21 $14 30 $14 41 $14 54 $14 69 ii) When price = $12 Output Price Total Marginal Total Cost Marginal Profit/Loss (pizza/hour) Revenue Revenue (dollars/hour) Cost $12 10 $12 21 $12 30 $12 41 UIAWN $12 54 $12 69 iii) When price = $10 Output Price Total Marginal Total Cost Marginal Profit/Loss (pizza/hour) Revenue Revenue (dollars/hour) Cost