When Patricia Flagg's Friend Asked Her Create Something to Sell

When Patricia Flagg's friend asked her create something to sell at a holiday boutique food booth, she had no idea she was launching a new business. For her initial product she packaged eleven different kinds of beans, some herbs, and some spices with directions to add a ham hock, water, and vegetables for Minnesota Heartland soup. She has since added Illinois Prairie Corn chowder, which has dry corn, rice, and seasonings, as well as a Louisiana Red Bean gumbo mix and a New England fish soup mix. Each mix makes enough to feed 10 people. Her annual fixed costs are $9,000, and the variable costs for one bag of soup mix are $1.50. An individual bag of soup mix sells for $6.50. In her first year of operation, she sold 3,800 mixes.
-The average fixed cost curve for Frontier Soup would:

A) decline as output increases.
B) be U-shaped.
C) increase as output increases.
D) decrease as output decreases.
E) be unaffected by the supply and demand curve.

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