Exhibit 7-2 Cost schedule for pizza production

Exhibit 7-2 shows the labor, energy, and materials cost of making various quantities of pizzas. The table shows that the labor cost of making pizzas will:

Question

Exhibit 7-2 Cost schedule for pizza production

Exhibit 7-2 shows the labor, energy, and materials cost of making various quantities of pizzas. The table shows that the labor cost of making pizzas will:

Quizplus · Accepted Answer

The labor cost per pizza is decreasing as the quantity produced increases due to specialization and economies of scale. However, as the quantity produced continues to increase, the marginal cost of labor will increase at an increasing rate due to overcrowding and diminishing marginal returns.

Exhibit 7-2 Cost Schedule for Pizza Production