The table below shows a pizzeria's fixed cost and variable cost at different levels of output. Pizza's sell for $20 each. $$\begin{array} { | c | c | c | }
\hline \begin{array} { c }
\text { Number of } \
\text { Pizzas Per Day }
\end{array} & \begin{array} { c }
\text { Fixed Cost } \
\text { (\$/Day) }
\end{array} & \begin{array} { c }
\text { Variable Cost } \
\text { (\$/Day) }
\end{array} \
\hline 0 & 500 & 0 \
\hline 25 & 500 & 150 \
\hline 50 & 500 & 250 \
\hline 75 & 500 & 450 \
\hline 100 & 500 & 850 \
\hline 125 & 500 & 1,650 \
\hline
\end{array}$$ When the pizzeria makes 100 pizzas per day, it earns an economic ______ of ______.

Question

The table below shows a pizzeria's fixed cost and variable cost at different levels of output. Pizza's sell for $20 each. $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Number of } \
\text { Pizzas Per Day }
\end{array} & \begin{array} { c } 
\text { Fixed Cost } \
\text { (\$/Day) }
\end{array} & \begin{array} { c } 
\text { Variable Cost } \
\text { (\$/Day) }
\end{array} \
\hline 0 & 500 & 0 \
\hline 25 & 500 & 150 \
\hline 50 & 500 & 250 \
\hline 75 & 500 & 450 \
\hline 100 & 500 & 850 \
\hline 125 & 500 & 1,650 \
\hline
\end{array}$$ When the pizzeria makes 100 pizzas per day, it earns an economic ______ of ______.

Quizplus · Accepted Answer

To find the economic profit, we need to subtract the total cost from the total revenue.
Total revenue at 100 pizzas per day = 100 x $20 = $2,000
Total cost at 100 pizzas per day = Fixed cost + Variable cost = $500 + $850 = $1,350
Economic profit = Total revenue - Total cost = $2,000 - $1,350 = $650
Since the economic profit is positive, the pizzeria is making a profit at 100 pizzas per day, and the correct answer is B.

The Table Below Shows a Pizzeria's Fixed Cost and Variable