Question

The average cost to make a t-shirt approaches $______ as the number of t-shirts made increases.

Option 1: $10
Option 2: $15
Option 3: $20
Option 4: $25

Answer 1

Without specific details on the cost structure of the company, it is impossible to accurately determine the average cost per t-shirt as production increases.

Step-by-step explanation:

The question seems to concern the concept of economies of scale, which is a principle in business and economics related to the cost advantages that a business obtains due to expansion. In the context of manufacturing t-shirts, the average cost per t-shirt is expected to decrease as the number of t-shirts made increases. This occurs because fixed costs such as machinery, rent, and initial setup costs are spread out over more units, and variable costs may decrease due to more efficient use of materials and labor or bulk purchases.

Although the provided information contains examples of various t-shirt prices and costs of orders, it does not detail the fixed and variable costs associated with the production to calculate the accurate average cost per t-shirt as production scales. Therefore, based on the information presented, it is not possible to provide a precise answer regarding which option between $10, $15, $20, or $25 is correct. A deeper analysis of the company's cost structure would be required.