Average total cost equals
A) average fixed cost plus average variable cost plus marginal cost.
B) total fixed cost divided by output.
C) total cost minus total variable cost.
D) the change in total cost divided by the change in output.
E) average fixed cost plus average variable cost.

Question

Quizplus · Accepted Answer

Average total cost is the total cost divided by the level of output. Total cost includes both fixed and variable costs. Therefore, average total cost is the sum of average fixed cost (fixed cost per unit of output) and average variable cost (variable cost per unit of output).

Average Total Cost Equals