Solved: A compute average fixed costs average variable costs and, Business Management

A compute average fixed costs average variable costs and

Suppose Sarah owns a small company that makes wedding cakes. The table below shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day. The bakery business is competitive.

1955_small company that makes wedding cakes.png

a) Compute average fixed costs, average variable costs, and the marginal cost of Sarah's bakery.

b) If each cake sells for $125, compute Sarah's profit/loss.

c) If Sarah's fixed costs for up by $200, in the short run, should she continue production or should she close her bakery? Why?

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