ATC can be calculated as follows:

Question

Quizplus · Accepted Answer

ATC or average total cost is calculated by adding the AFC or average fixed cost and AVC or average variable cost. Hence, the formula for ATC is AFC+AVC. Option D is the only one that provides this formula. Option A multiplies AFC and AVC which would give the total cost rather than ATC. Option B subtracts AVC from AFC which doesn't give the correct formula for ATC. Option C adds AFC and AVC but then multiplies it by Q or quantity which also doesn't give the correct formula for ATC.

ATC Can Be Calculated as Follows