A firm's short-run average cost is defined as
A)the ratio of total output to short-run total cost.
B)the ratio of short-run total cost to total output.
C)the additional cost of producing one more unit of output while some input is fixed.
D)the additional cost of producing one more unit of output while all inputs are fixed.

Question

Quizplus · Accepted Answer

Short-run average cost is calculated by dividing the short-run total cost by the total output. This gives the average cost of producing each unit of output when at least one input is fixed.

A Firm's Short-Run Average Cost Is Defined as