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Cost functions A small T-shirt factory One machine is leased at the rate of $20 per week, The machine is operated by one worker Hourly wage : $1 during.

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Presentation on theme: "Cost functions A small T-shirt factory One machine is leased at the rate of $20 per week, The machine is operated by one worker Hourly wage : $1 during."— Presentation transcript:

1 Cost functions A small T-shirt factory One machine is leased at the rate of $20 per week, The machine is operated by one worker Hourly wage : $1 during weekdays (up to 40 hours) $2 on Saturdays (up to 8 hours) $3 on Sundays (up to 8 hours) The machine produces 1 T-shirt per hour

2 Suppose the factory produces 40 T-shirts per week. Find the
Fixed cost : Variable cost : Average cost : Marginal cost :

3 Benetton, the sole buyer of T-shirts from the small factory, is offering a price of $1.8 per T-shirt. They are willing to buy as many as the factory can supply. Given this offer, should the factory operate on Saturday?

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