Use the Following to Answer Questions

question 120

Multiple Choice

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 two mixers and bakes 200 cakes per day, what is her average fixed cost?

• A) $300,000
• B) $1,508
• C) $187.50
• D) $7.50

---

Definitions:

Sample Size

The number of observations or replicates to include in a statistical sample.

Population Standard Deviation

A measure of the dispersion or variability of a set of data points in a population, denoting how spread out the data points are from the mean of the population.

Sample Size

The number of observations or units collected in a study or used in statistical analysis.

Error of Estimation

The discrepancy between a population parameter and its estimate based on a sample.