Asked by Kayla Driffin on Apr 28, 2024
Verified
Refer to Figure 8.2 above. If The Barber Shop produces more than 300 hair cuts, the average fixed costs are
A) < $10.
B) $10.
C) > $10.
D) There is not enough information in the graph to answer this question.
Average Fixed Costs
The fixed costs (those not changing with output level) of production divided by the quantity of output produced.
- Acquire insight into the categorization of costs as fixed, variable, and total.
- Compute the mean fixed expenses, aggregate variable expenses, and the overall costs using the provided information.
- Use graphical representations to scrutinize cost configurations and determine informed choices.
Verified Answer
JC
Jaylen CoferhiBmlMay 01, 2024
Final Answer :
A
Explanation :
Average fixed costs decrease as the quantity of output increases because the total fixed costs are spread over a larger number of units. Therefore, if The Barber Shop produces more than 300 haircuts, the average fixed cost per haircut would be less than $10.
Learning Objectives
- Acquire insight into the categorization of costs as fixed, variable, and total.
- Compute the mean fixed expenses, aggregate variable expenses, and the overall costs using the provided information.
- Use graphical representations to scrutinize cost configurations and determine informed choices.