Use the following to answer question:
-(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 2 mixers and bakes 100 cakes per day,what is her average fixed cost?
A)$10,000
B)$1,000
C)$15
D)$10

Question

Use the following to answer question: 
-(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 2 mixers and bakes 100 cakes per day,what is her average fixed cost?
A)$10,000 
B)$1,000 
C)$15 
D)$10

Quizplus · Accepted Answer

If Pat purchases 2 mixers and bakes 100 cakes per day, her total fixed cost would be $3,000, and her total variable cost would be $1,500 ($15 average variable cost x 100 cakes). Therefore, her total cost would be $4,500.

To find her average fixed cost, we divide the total fixed cost by the quantity of output:
Average fixed cost = Total fixed cost / Quantity of output
Average fixed cost = $3,000 / 100 cakes
Average fixed cost = $30/cake

Therefore, Pat's average fixed cost per cake is $30, which is answer choice C.

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