Knowledge of total variable costs and fixed costs for various outputs enables one to determine which of the following?
A)Average cost.
B)Average fixed cost.
C)Average variable cost.
D)Marginal cost.
E)All the above.

Question

Quizplus · Accepted Answer

Total variable costs and fixed costs are essential for calculating average cost, average fixed cost, average variable cost, and marginal cost. Average cost is determined by dividing the total cost (fixed plus variable) by the quantity produced. Average fixed cost is calculated by dividing total fixed costs by the quantity produced. Average variable cost is found by dividing total variable costs by the quantity produced. Marginal cost is the additional cost of producing one more unit, which can be derived from changes in total cost as output changes.

Knowledge of Total Variable Costs and Fixed Costs for Various