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. How many mixers should Pat buy to get the lowest average total cost if she plans to make 200 cakes?
A) one
B) two
C) three
D) Can't be determined without more information

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. How many mixers should Pat buy to get the lowest average total cost if she plans to make 200 cakes?
A) one 
B) two 
C) three 
D) Can't be determined without more information

Quizplus · Accepted Answer

To determine the lowest average total cost, calculate the total cost for each option (fixed cost + variable cost for 200 cakes) and divide by 200. Choose the number of mixers with the lowest average total cost.

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