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 3 mixers and bakes 400 cakes per day,what is her average total cost?
A)$10.25
B)$12.50
C)$16.50
D)$2,504.00

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 3 mixers and bakes 400 cakes per day,what is her average total cost?
A)$10.25 
B)$12.50 
C)$16.50 
D)$2,504.00

Quizplus · Accepted Answer

The average total cost (ATC) is calculated by adding the average fixed cost (AFC) and the average variable cost (AVC) and then dividing by the quantity of output. Given that Pat purchases 3 mixers and bakes 400 cakes per day, without the specific numbers from the table, we can infer that the correct ATC must be a per-unit cost rather than a total cost figure, making $10.25 the most plausible choice.

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