The average total cost of production
A) is the extra cost required to produce one more unit.
B) equals the explicit cost of production.
C) equals total cost of production divided by the level of output.
D) equals total cost of production multiplied times the level of output.

Question

Quizplus · Accepted Answer

The average total cost of production is calculated by dividing the total cost of production by the level of output. It represents the cost per unit of output and is a key metric for determining the profitability of a company. Option A is the definition of marginal cost, Option B refers only to the explicit cost, while Option D is not a valid formula for calculating the average total cost of production.

The Average Total Cost of Production