Given the total cost function,TC = 120 + 12Q,the average cost function is A) 12Q + (12/Q). B) (120/Q)+ 12. C) 120Q + 12Q². D) 120Q + 12. E) 132.

Question

Quizplus · Accepted Answer

The formula for average cost (AC) is AC = TC/Q.

From the given total cost function, we can derive average cost by dividing total cost by quantity:

TC/Q = (120 + 12Q)/Q

Simplifying this expression:

AC = 120/Q + 12

Therefore, the answer is B: (120/Q) + 12.

Given the Total Cost Function,TC = 120 + 12Q,the Average