Asked by Judith Parsons on May 09, 2024
Verified
(Table: Cakes) Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers,her average fixed cost _____ in the range of output between 100 and 400 cakes.
A) increases
B) decreases
C) remains the same
D) can't be calculated
Average Fixed Cost
The total fixed costs of production divided by the quantity of output produced, decreasing as quantity increases.
Range of Output
The difference between the maximum and minimum levels of production output possible for a given firm or industry.
Cakes
Baked goods made from ingredients such as flour, sugar, eggs, and butter, often prepared and decorated for special occasions.
- Calculate the mean fixed, variable, and total expenditures given certain data.
Verified Answer
RH
Rahat HashmiMay 11, 2024
Final Answer :
B
Explanation :
Average fixed cost decreases as output increases because the fixed cost is spread over a larger number of units.
Learning Objectives
- Calculate the mean fixed, variable, and total expenditures given certain data.