If average total cost is $40 and average variable cost is $20 at 10 units of output and the marginal cost of the 11th unit is $30, what is the average total cost of 11 units?

Question

Quizplus · Accepted Answer

The average total cost (ATC) of 11 units can be calculated by understanding that the total cost increases by the marginal cost of the 11th unit. Initially, for 10 units, the total cost is $40 * 10 = $400. The cost of the 11th unit is $30, making the new total cost $430 for 11 units. Therefore, the ATC for 11 units is $430 / 11 = $39.09.

If Average Total Cost Is $40 and Average Variable Cost