# Assume that fixed costs are $10. What is the average total cost of 4 cakes? A.$25.00 B. $12.00... ## Question: Assume that fixed costs are$10. What is the average total cost of 4 cakes?

A. $25.00 B.$12.00

C. $35.00 D.$9.50

## Total Cost:

Total cost of production, especially in the short run, involves both fixed costs and variable costs. Fixed costs are expenses that do not vary with the level of production. Variable costs, on the other hand, increase with production. If variable cost is constant, then average total cost will decline as more is produced.