Average cost equals:
A)price.
B)the cost of producing one additional unit.
C)total cost divided by output.
D)total revenue divided by quantity.

Question

Quizplus · Accepted Answer

The average cost is calculated by dividing the total cost by the quantity of output. This gives the cost per unit, which is useful for analyzing the efficiency of a production process and making pricing decisions. Options A and D are incorrect because the price and revenue are different concepts than cost. Option B is incorrect because it refers to the marginal cost, which is the cost of producing one additional unit, but not the average cost.

Average Cost Equals