Calculate the total revenue and total economic profit

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The table below represents the hourly output and cost structure for a local pizza shop. The market is perfectly competitive, and the market price of a pizza in the area is $10. Total costs include all opportunity costs. (See pages 530-534.)

Total Hourly Output

Total Hourly

and Sales of Pizzas

Cost ($)

0

5

1

9

2

11

3

12

4

14

5

18

6

24

7

32

8

42

9

54

10

68

a. Calculate the total revenue and total economic profit for this pizza shop at each rate of output.

b. Assuming that the pizza shop always produces and sells at least one pizza per hour, does this appear to be a situation of short-run or long-run equilibrium?

c. Calculate the pizza shop's marginal cost and marginal revenue at each rate of output. Based on marginal analysis, what is the profit-maximizing rate of output for the pizza shop?

Reference no: EM131166776

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