You are thinking about setting up a food stall selling pizzas at the summer music festivals. A pizza oven and van will cost $75,000. The ingredients for the pizzas are around $3 per pizza plus wages of $25 per hour and energy costs of $5 per hour.

1. What is the fixed cost of this business? What are the variable costs of the business? Explain (2 Marks)
2. What might be included as an implicit cost. Explain (1 Mark)
3. Assuming you can make 40 pizzas per hour, what is the variable cost of each pizza? What is the marginal cost of a pizza? (2 Marks)