QUESTION 4 Number of Costs $1,000 1,500 2,500 Variable Cost $10 how many mixers

Question

QUESTION 4 Number of Costs $1,000 1,500 2,500 Variable Cost $10 how many mixers to purchase. Her estimated foced and costs if she purchases one, two, or three mixers are shown in the table. Assume that average variable oosts do not vary with the quantity of output. If Pat purchases one mixer and bakes 100 cakes per day, what is her average total cost? OA. S10 OB. S20 $15 D. $1.010 QUESTION 5 cost is- O A average total; decreasing C. marginal: necessarily increasing 0 D. average total; increasing 1 points Save QUESTION 6 total cost curve is primarily due to D.t

Explanation / Answer

4)

Total cost = FC + Q x AVC = 1000 + 100 x 10 = $2000

ATC = TC/Q = 2000/100 = $20

Option B is correct

5)

Option A is correct (If marginal cost is less than average total cost, then average total cost is decreasing)

6)

Option A is correct (U shape of the LRATC is primarily due to economies and diseconomies of scale)

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