Question

Average cost is:
a. (variable cost)/(quantity).
b. (fixed cost)/(quantity).
c. (total cost)/(change in quantity).
d. (change in total costs)/(change in quantity).
e. (total cost)/(quantity).
f. (change in total costs)/(quantity).

Answer 1

Answer:

e. (total cost)/(quantity).

Explanation:

The average cost is the cost that includes the variable plus fixed cost and the number of units produced which we called as a quantity

In mathematically,

Average cost = Total cost ÷ Quantity

where,

Total cost = Fixed cost + variable cost

It is a sum of fixed cost and the variable cost

Quantity = Number of units produced