If you know that total fixed cost is $200, total variable cost is $600, and total product is 4 units, then average total cost must beMultiple Choice$200.$250.$800.$3,200.
Question
If you know that total fixed cost is 600, and total product is 4 units, then average total cost must beMultiple Choice250.3,200.
Solution
The average total cost (ATC) is calculated by dividing the total cost (TC) by the quantity of output produced. The total cost is the sum of total fixed costs (TFC) and total variable costs (TVC).
Here's the step-by-step calculation:
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First, calculate the total cost (TC). The total cost is the sum of total fixed costs and total variable costs. In this case, TC = TFC + TVC = 600 = $800.
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Next, calculate the average total cost (ATC). The average total cost is the total cost divided by the quantity of output produced. In this case, ATC = TC / Quantity = 200.
So, the average total cost is $200.
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