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Average total cost is defined as: A. Total output times total cost.B. Total cost...
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Of the choices given here, the best answer is B. This equation gives us the average cost incurred by making each unit of output.
Costs for making a certain kind of product are not constant for each unit produced. Costs generally drop as more units are made, but this trend only lasts until a certain point. Later, the costs go back up. By figuring the average total cost, we are able to generalize about how much it costs to make each unit of output.
Of the other choices given, only C is the definition of an important economic concept. The change in total cost that comes about from a one-unit increase in output is called the marginal cost of producing that one unit.
Clearly, B is the correct answer.
Posted by pohnpei397 on April 26, 2013 at 7:53 PM (Answer #1)
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