Asked by Sydney Horton on Jun 27, 2024
Verified
Answer the question on the basis of the following information: TFC = Total Fixed Cost Q= Quantity of Output MC = Marginal Cost P= Product Price TVC = Total Variable Cost \begin{array} { l l } \text { TFC = Total Fixed Cost } & Q = \text { Quantity of Output } \\\text { MC = Marginal Cost } & P = \text { Product Price } \\\text { TVC = Total Variable Cost } &\end{array} TFC = Total Fixed Cost MC = Marginal Cost TVC = Total Variable Cost Q= Quantity of Output P= Product Price Refer to the information.Average total cost is:
A)
TVC - MC \text { TVC - MC } TVC - MC
B)
TVC - TFC Q\frac { \text { TVC - TFC } } { Q }Q TVC - TFC
C)
TVC Q\frac { \text { TVC } } { Q }Q TVC
D)
TFC + TVC Q\frac { \text { TFC } + \text { TVC } } { Q }Q TFC + TVC
Average Total Cost
The total cost divided by the number of goods or services produced, representing the per unit cost of production.
Total Fixed Cost
Total fixed cost refers to the sum of all costs required to produce any output in which these costs do not change with the level of output.
Total Variable Cost
The total of expenses that vary directly with the volume of production or sales, such as materials and labor.
- Assess distinct cost parameters (MC, ATC, AVC, AFC) employing given data.
Verified Answer
ZK
Zybrea KnightJul 03, 2024
Final Answer :
D
Explanation :
Average total cost (ATC) is the total cost divided by the quantity of output.
Total cost = Total Fixed Cost (TFC) + Total Variable Cost (TVC)
Therefore, ATC = (TFC + TVC) / Q, which is option D.
Total cost = Total Fixed Cost (TFC) + Total Variable Cost (TVC)
Therefore, ATC = (TFC + TVC) / Q, which is option D.
Learning Objectives
- Assess distinct cost parameters (MC, ATC, AVC, AFC) employing given data.