Question

Iyana's Pizzas is a takeout-only pizza parlor servicing the college campus of Urbana that specializes in vegan pizzas. Iyana's small shop has tiarely enough room for customers to stand and wait, let alone the four pizza ovens necessary to keep up with the hungry student customers. Iyana signed a lease renting both the four ovens and the storefront for the next year, Due to the terms of the lease and the building's size constraint, lyana is unable to change the store's number of pizza ovens in the short run.

However, Iyana does foce a decision regarding the number of employees to schedule on a weekly basis. Every Sunday, Iyana contacts the staff to communicate the amount of workers needed on each day of the upcoming week. In the short run, the store employees are__________inputs and pizza ovens are _________inputs.

Answer 1

Iyana's store employees at the pizza parlor are variable inputs, while the pizza ovens are fixed inputs. Employees can be adjusted weekly, but the number of ovens cannot change due to lease terms.

Step-by-step explanation:

In the scenario described for Iyana's Pizzas, the store employees are variable inputs because Iyana can change the number of employees each week depending on the need. The pizza ovens, in contrast, are fixed inputs as the number can't be altered in the short run due to the lease and physical constraints.

Variable inputs in a business are those that can be adjusted quickly and with relative ease to match the production needs, such as labor and raw materials. In Iyana's case, she can hire or schedule more or fewer employees based on anticipated demand. Fixed inputs, like the pizza ovens, are those assets that cannot be readily adjusted; changes to these often require significant time or capital investment.

In summary, Iyana has flexibility in manipulating her labor force to match business demands but is restricted when it comes to altering the number of pizza ovens due to her current lease agreement.