Cindy operates Birds-R-Us, a small store manufacturing and selling 100 bird feeders per month.Cindy's monthly total fixed costs are $500, and her monthly total variable costs are $2,500.If for some reason Cindy's fixed cost fell to $400, then her:
A)average fixed costs would increase.
B)average total costs would decrease.
C)marginal costs would decrease.
D)average variable costs would decrease.

Question

Quizplus · Accepted Answer

The average total costs would decrease because the fixed costs have decreased, reducing the overall total costs when averaged over the 100 bird feeders.

Cindy Operates Birds-R-Us, a Small Store Manufacturing and Selling 100