Henrietta's fixed cost of catering meals is $1,000. She spends $14,000 on the cost of food to make meals and labor when she caters 100 meals. Which of the following is true if the price that she gets for catering a meal is $10?

Question

Quizplus · Accepted Answer

Henrietta's total cost is the sum of her fixed cost ($1,000) and variable costs ($14,000), totaling $15,000 for 100 meals. This means her average total cost is $150 per meal. Since she charges $10 per meal, she is making a loss because her price is lower than her average total cost.

Henrietta's Fixed Cost of Catering Meals Is $1,000