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Question: Consider Pat's Pizza Restaurant's production decision in both the short-run and long-run. Pat wants to improve the productivity of the firm in the long run. Explain the types of input costs that might be fixed in the short-run and types of costs that may be variable in the long-run. Provide examples for fixed inputs and variable inputs as well as fixed costs and variable costs for the Restaurant in the short run. What long run economic decisions should Pat make to increase productivity, minimize costs, and maximize profit?
Marginal Product of Capital 4,000
Marginal Produce of Labor 100
Wage Rate $10
Rental Price of Pizza Ovens $500
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