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 three mixers, her average fixed cost _____ in the range of output between 100 and 400 cakes.
A) increases
B) decreases
C) remains the same
D) can't be calculated

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 three mixers, her average fixed cost _____ in the range of output between 100 and 400 cakes.
A) increases 
B) decreases 
C) remains the same 
D) can't be calculated

Quizplus · Accepted Answer

Average fixed cost decreases as output increases because the fixed cost is spread over more units.

Use the Following to Answer Questions