Question
In a slow year, Deutsche Burgers will produce 2.400 million hamburgers at a total cost of $3.900 million. In a good year, it can produce
In a slow year, Deutsche Burgers will produce 2.400 million hamburgers at a total cost of $3.900 million. In a good year, it can produce 4.200 million hamburgers at a total cost of $4.800 million. a. What are the fixed costs of hamburger production? (Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.) b. What is the variable cost per hamburger? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What is the average cost per burger when the firm produces 1 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. What is the average cost per burger when the firm produces 2 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.) e. Why is the average cost lower when more burgers are produced? The fixed costs are spread across more burgers. Variable costs are lower per burger. Fixed costs are constant per burger.
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