Use the following to answer questions:
-(Table: Cakes) Look at the 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 one, two, or three mixers are shown in the table. Assume that average variable costs do not vary with the quantity of output. If Pat purchases one mixer 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 questions: 
-(Table: Cakes) Look at the 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 one, two, or three mixers are shown in the table. Assume that average variable costs do not vary with the quantity of output. If Pat purchases one mixer 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

Average fixed cost is calculated by dividing the total fixed cost by the quantity of output. If Pat purchases one mixer, the fixed cost is $1,000. Dividing $1,000 by 100 cakes gives an average fixed cost of $10 per cake.

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