Asked by Junwei Zheng on Jun 15, 2024
Verified
The table below lists the short-run costs for One Guy's Pizza. If One Guy's can sell all the output they produce for $12 per unit, how much should One Guy's produce to maximize profits? Does One Guy's Pizza earn an economic profit in the short-run?
Short-Run Costs
Expenses that vary directly with the level of output in the short term, where at least one input is fixed.
Economic Profit
A firm's total revenue minus its explicit and implicit costs, representing the additional benefit above the normal rate of return.
Maximize Profits
The process or strategy employed by businesses to achieve the highest possible profit margin.
- Calculate the profit-maximizing level of output for firms in various competitive scenarios and determine the presence of economic profits or losses.
Verified Answer
MS
Michael SungaJun 18, 2024
Final Answer : 
The optimal output for One Guy's Pizza is at 60 units. At this output level, One Guy's Pizza earns a profit of $260.
The optimal output for One Guy's Pizza is at 60 units. At this output level, One Guy's Pizza earns a profit of $260.
Learning Objectives
- Calculate the profit-maximizing level of output for firms in various competitive scenarios and determine the presence of economic profits or losses.