THE AMAZING TORTILLA -INTERPRETING DATA
When The Amazing Tortilla Company first opened ,its owner hoped to sell about 1,000 dozen tortillas daily
To produce this quantity ,the owner rented a bulding and purchased the needed equipment .
The owner wasn't sure if people would buy the tortillas so the business was risky . Fortunately customers loved
the fresh taste of homemade corn tortillas .The business sold all it could make ,so it continually expanded its
daily production ..
At first the business could increase production without raising its
marginal cost of $.50 a dozen .(marginal cost is the cost of producing each additional dozen )
As production continued to expand ,however ,the owner had to
work the equipment harder and longer each day.This caused
more breakdowns and led to additional repair expenses .Hiring
more workers also began to crowd th limited equipment. And
the owner had to spend even more time at the business making
sure that everything worked properly and that orders were
shipped an schedule .As a result ,the company's marginal cost of
tortillas began to rise as daily production increased .The table
shows the owner's estimade of marginal cost ..
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