Which of the following cost concepts is correctly defined?
A)MC = ∆TC / ∆FC
B)ATC = VC + FC
C)ATC = AVC + AFC
D)TC = AVC + AFC

Question

Quizplus · Accepted Answer

ATC (Average Total Cost) is the sum of Average Variable Cost (AVC) and Average Fixed Cost (AFC). Therefore, option C is the correct definition. Option A defines the concept of Marginal Cost (MC). Option B defines the concept of Total Cost (TC), but it is not the average cost. Option D also defines the concept of Total Cost (TC), but it does not differentiate between the fixed and variable components of the cost.

Which of the Following Cost Concepts Is Correctly Defined