View the step-by-step solution to:

William is the owner of a small pizza shop and is thinking of increasing products and lowering costs. William's Pizza show owns four ovens and the...

William is the owner of a small pizza shop and is thinking of increasing products and lowering costs.  William's Pizza show owns four ovens and the cost of the four ovens is $1,000.  Each worker is paid $500 per week. 

Workers employed     Qty of pizzas produced per week

0                                         0

1                                         75

2                                        180

3                                         360

4                                        600

5                                        900

6                                        1140

7                                         1260

8                                        1360

Show all of your calculations and processes. Describe youranswer for each question in complete sentences, whenever it is necessary.

  1. Which inputs are fixed and which are variable in the production function of William’s pizza shop? Over what ranges do there appear to be increasing, constant, and/or diminishing returns to the number of workers employed?

  2. What number of workers appears to be most efficient in terms of pizza product per worker?

  3. What number of workers appears to minimize the marginal cost of pizza production assuming that each pizza worker is paid $500 per week?

  4. Why would marginal productivity decline when you hire more workers in the short run after a certain level?

  5. How would expanding the business affect the economies of scale? When would you have constant returns to scale or diseconomies of scale? Describe your answer.

Sign up to view the entire interaction

Top Answer

The best way to approach your question... View the full answer

William's Pizza.docx

William is the owner of a small pizza shop and is thinking of increasing products and lowering
costs. William’s pizza shop owns four ovens and the cost of the four ovens is $1,000. Each
worker is...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online