Which inputs are fixed and which are variable in the production function of Williams pizza shop?

William is the owner of a small pizza shop and is thinking of increasing products and Show more Problem 1: William is the owner of a small pizza shop and is thinking of increasing products and lowering costs. Williams pizza shop owns four ovens and the cost of the four ovens is $1000. Each worker is paid $500 per week. Show all of your calculations and processes. Describe your answer for each question in complete sentences whenever it is necessary. Which inputs are fixed and which are variable in the production function of Williams pizza shop? Over what ranges do there appear to be increasing constant and/or diminishing returns to the number of workers employed? What number of workers appears to be most efficient in terms of pizza product per worker? What number of workers appears to minimize the marginal cost of pizza production assuming that each pizza worker is paid $500 per week? Why would marginal productivity decline when you hire more workers in the short run after a certain level? How would expanding the business affect the economies of scale? When would you have constant returns to scale or diseconomies of scale? Describe your answer. Problem 2: The Paradise Shoes Company has estimated its weekly TVC function from data collected over the past several months as TVC = 3450 + 20Q + 0.008Q2 where TVC represents the total variable cost and Q represents pairs of shoes produced per week. And its demand equation is Q = 4100 25P. The company is currently producing 1000 pairs of shoes weekly and is considering expanding its output to 1200 pairs of shoes weekly. To do this it will have to lease another shoe-making machine ($2000 per week fixed payment until the lease period ends). Show all of your calculations and processes. Describe your answer for each item below in complete sentences whenever it is necessary. Describe and derive an expression for the marginal cost (MC) curve. Describe and estimate the incremental costs of the extra 200 pairs per week (from 1000 pairs to 1200 pairs of shoes). What are the profit-maximizing price and output levels for Paradise Shoes? Describe and calculate the profit-maximizing price and output. Discuss whether or not Paradise Shoes should expand its output further beyond 1200 pairs per week. State all assumptions and qualifications that underlie your recommendation. SHOW ALL WORK AND CALCULATIONS Show less

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