Average total cost:
A) Increases in direct proportion to an increase in output.
B) Is constant no matter what quantity of output is produced.
C) Changes as a function of the next unit of output produced.
D) Is the summation of all the expenses of a firm for a stated period of time.
E) Is equal to the average fixed cost plus the average variable cost.

Question

Quizplus · Accepted Answer

Average total cost (ATC) is indeed the sum of average fixed cost (AFC) and average variable cost (AVC), which is calculated for any given level of output by dividing the total cost (fixed and variable costs combined) by the quantity of output produced.

Average Total Cost