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Question - In a slow year, Deutsche Burgers will produce 3.2 million hamburgers at a total cost of $4.2 million. In a good year, it can produce 4.8 million hamburgers at a total cost of $5.4 million.
a. What are the fixed costs of hamburger production?
b. What is the variable cost per hamburger?
c. What is the average cost per burger when the firm produces 2 million hamburgers?
d. What is the average cost per burger when the firm produces 3 million hamburgers?
e. Why is the average cost lower when more burgers are produced?
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