Question

The table below represents the hourly output and cost structure for a local pizza shop. The market is perfectly compettive, and the market price of a pizza in the area is $10. Total costs include all implicit opportunity costs. Calculate the pizza shop's marginal cost and marginal revenue each rate of output and ill in the values in the table. Total Hourly Output Tetal Hourty Tetal Total Economic Marginal Marginal and Sales of Pizzas Cost) Reven(Profit ( Cost (3) Revenue (3) 10

Answer 1

Marginal cost is the additional cost incurred when one more unit of good is produced.

MC= TC_{​​​​​t} - TC_{​​​​​t-1}

Marginal revenue is the additional revenue earned when one more unit of good is produced.

MR = TR_​​​t​​​​ - TR_{​​​TRt-1}