Use the Following to Answer Question

question 317

Multiple Choice

Use the following to answer question:
-(Table: Cakes) Use 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 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 2 mixers and bakes 400 cakes per day,what is her average total cost?

• A)$0.02
• B)$10.75
• C)$500
• D)$1,507

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Definitions:

Collateral

An asset pledged as security for the repayment of a loan, forfeitable in case of default.

Franchising

A method of expanding a business and distributing goods and services through a licensing relationship.