Calculate the average incremental cost for pizza

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Reference no: EM131246400

Suppose a firm produces two goods, pizzas and subs. Let Qp represent the number of pizzas produced and Qs represent the number of subs produced. The firm's cost function is given by TC= 4 + 12Qp + 4Qs.

a. Calculate the average incremental cost for pizza (AICp).

b. Calculate the scale economy index for pizza (Sp). Are the scale economies in the production of pizza?

c. Does this firm possess economies of scope? Why?

Reference no: EM131246400

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