Question

Given the following information for a restaurant, what is this firm's ATC, MC and TC at Q = 0, 1, 2, 3, and 4?  

Building lease = $600

Interest owner could have earned on funds invested in business = $400

Food per meal = $500 / meal

Servers for each meal = $400/ meal

Time owner spends at each meal = $100/meal

Answer 1

Output	Fixed cost	Variable cost	Total cost	Marginal cost	Average total cost
0	600	-	600	-	600
1	600	500+400	1500	900	1500
2	600	1000+800	2400	800	1200
3	600	1500+1200	3300	900	1100
4	600	2000+1600	4200	900	1050

Only explicit costs are considered like fixed and varibale costs. Opportunity cost of interest foregone and time spent on each meal by owner are not considered.

Hence in this case, implicit costs of interest owner could have achieved and also time spent is considered.