Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}
\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \
\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \
0 & 0 \
1 & 20 \
2 & 30 \
3 & 35 \
4 & 42 \
5 & 50 \
6 & 70 \
7 & 100
\end{array}$
-The ATC of producing 5 pizzas is equal to:

Question

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
 $\begin{array}{ll}
\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \
\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \
0 & 0 \
1 & 20 \
2 & 30 \
3 & 35 \
4 & 42 \
5 & 50 \
6 & 70 \
7 & 100
\end{array}$
-The ATC of producing 5 pizzas is equal to:

Quizplus · Accepted Answer

To find the ATC of producing 5 pizzas, we need to calculate the average total cost (ATC) at that level of output.

Total cost (TC) at 5 pizzas = TFC + TVC = $10 + $50 = $60

Average total cost (ATC) at 5 pizzas = TC / output = $60 / 5 pizzas = $12/pizza

Therefore, the ATC of producing 5 pizzas is $12.

The best choice(s) depend on the goal of the pizza restaurant. If the goal is to maximize profit, they should produce where marginal cost (MC) equals marginal revenue (MR). Unfortunately, we do not have information on marginal revenue, so we cannot determine the best choice. However, if the goal is to minimize average total cost (ATC), the restaurant should produce where ATC is the lowest.

Looking at the table, we can see that ATC decreases from 20 to 5 pizzas, then starts increasing again. This means that the best choice(s) for the pizza restaurant is to produce between 1 and 5 pizzas, where the ATC is decreasing. If they want to produce more than 5 pizzas, they will have to face increasing ATC.

Below Are the Costs for a Pizza Restaurant, the Output