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 1 mixer and bakes 200 cakes per day,what is her average fixed cost?
A)$5
B)$10
C)$200
D)$1,000

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 1 mixer and bakes 200 cakes per day,what is her average fixed cost?
A)$5 
B)$10 
C)$200 
D)$1,000

Quizplus · Accepted Answer

When Pat purchases 1 mixer, her fixed cost is $1,000. If she bakes 200 cakes per day, her average fixed cost is $1,000/200 = $5. Therefore, option A is the best choice.

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