Krista operates a dry-cleaning business in Tampa that incurs $900 per month in fixed costs.Last month her total output equaled 3,000 pounds of clothes.This month her total output fell to 2,700 pounds.This means her average fixed cost ________ by a little more than _.

Question

Quizplus · Accepted Answer

Average fixed cost is calculated by dividing the total fixed cost by the total output. In this case, the fixed cost is $900 per month. Last month, the average fixed cost was $900/3000 = $0.30 per pound. This month, the average fixed cost is $900/2700 = $0.33 per pound. Therefore, the average fixed cost has increased by $0.03 or 3.33 cents per pound.

Krista Operates a Dry-Cleaning Business in Tampa That Incurs $900