What does average total cost tell us
A)the total cost of the first unit of output, if total cost is divided evenly over all the units produced
B)the cost of a typical unit of output, if total cost is divided evenly over all the units produced
C)the cost of the last unit of output, if total cost does not include a fixed cost component
D)the variable cost of a firm that is producing at least one unit of output

Question

Quizplus · Accepted Answer

Average total cost (ATC) is the total cost of production divided by the total quantity of output produced. It indicates the cost of a typical unit of output if total cost is divided evenly over all the units produced. ATC takes into account both fixed and variable costs, which means it reflects the full cost of production. By comparing the ATC with the price of the product, firms can assess whether they are making a profit or a loss.

What Does Average Total Cost Tell Us