Problems and Applications Q6
Consider the following cost information for a pizzeria:
Quantity
Total Cost
Variable Cost
(Dozens of pizzas)
(Dollars)
(Dollars)
0 300 0
1 350 50
2 390 90
3 420 120
4 450 150
5 490 190
6 540
240
FILL IN THE BLANKS BELOW
The pizzeria’s fixed cost is $..................
Complete the third column of the following table by calculating the marginal cost per dozen pizzas using the information on total cost. Then complete the final column by calculating the marginal cost per dozen pizzas using the information on variable cost.
Quantity
Total Cost
Marginal Cost
Variable Cost
Marginal Cost
(Dozens of pizzas)
(Dollars)
Using Total Cost
(Dollars)
Using Variable Cost
(Dollars)
(Dollars)
0 300 0
1 350 50
2 390 90
3 420 120
4 450 150
5 490 190
6 540 240
True or False: It doesn’t matter whether you compute marginal cost using total cost or variable cost.
True
False
