In the short run, the average total cost of producing 200 pizzas is $ A In the long run, the average total cost of producing 200 pizzas is $ A . In the long run, it makes sense for this particular pizzeria to use Oven A if they plan on producing 200 pizzas.
In the short run, the average total cost of producing 200 pizzas is $ A In the long run, the average total cost of producing 200 pizzas is $ A . In the long run, it makes sense for this particular pizzeria to use Oven A if they plan on producing 200 pizzas.
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.3P
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Question
Transcribed Image Text:Imagine that a pizzeria has a small pizza oven, "Oven 1". In the immediate future,
they must use this oven in order to make pizzas. However, in one year's time, they
have the option to upgrade to "Oven 2". The table below displays the average total
cost of producing a given quantity of pizzas using each oven.
| Number of Pizzas
Oven 1 Average Total
Cost
Oven 2 Average Total
Cost
100
200
$5
$4
$5
$6
$7
$7
$5.50
$4
$2.50
$4
300
400
500
In the short run, the average total cost of producing 200 pizzas is $
A In the long run, the average total cost
of producing 200 pizzas is $
A . In the
long run, it makes sense for this particular pizzeria to use Oven
A if they plan on producing 200 pizzas.
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