Average total cost equals
A) total fixed cost plus total variable cost.
B) average fixed cost minus average variable cost.
C) average fixed cost plus average variable cost.
D) total cost minus average cost.

Question

Quizplus · Accepted Answer

Average total cost (ATC) is the total cost divided by the quantity produced. Total cost consists of both fixed costs and variable costs. Therefore, the formula for ATC is (Total Fixed Cost + Total Variable Cost) / Quantity produced. Hence, option C is the correct answer.

Average Total Cost Equals