Respuesta :
Suppose that, when producing 10 units of output, a firm's avc is $22, its afc is $5, and its mc is $30. this firm's Total Cost = $270
Variable Cost (AVC) = $22
Fixed Cost (AFC) = $5
Average Total Cost = Variable Cost + Fixed Cost
Average Total Cost = 22 + 5
Average Total Cost = $27
Therefore,
Total Cost = Average Total Cost * Qunatity Produced
Total Cost = 27 * 10
Total Cost = $270
In economics, total cost is the total of all expenses a company incurs to produce a particular level of output. It is typically expressed as the sum of all fixed costs (such as the cost of a building lease and the cost of large machinery), which do not change depending on how much output is produced, and all variable costs (such as the cost of labor and raw materials), which do change depending on the output level. Long-term rate of increase in total cost with increasing output will be progressively greater if fixed costs are not changed (e.g., by purchasing a larger building or more heavy gear). This is because extra units of output have diminishing returns. That is, over the long haul.
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