Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 13 - Part V - The Costs of Production - Problems and Applications - Page 277: 6

Answer

a) 300 dollars b) Please see the table.

Work Step by Step

a) At no pizzas, the company incurs a total cost of 300 dollars. However, the company has no variable cost at that level of output. We know $TC = FC+VC$, so with the data above, $300=FC+0$ $300=FC$ b) The marginal cost per dozen pizzas using the variable cost data is the same as the marginal cost per dozen pizzas using the total cost data.
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