What is the average total cost when output is 200 units in the table above is
- N1.00
- N2.0
-
N1.20
- N2.40
The correct answer is: C
Explanation
Average cost = total cost / output (quantity)
since total cost is not given in the diagram, we have to derive it. its gotten as;
Total cost = fixed cost + variable cost
TC = 100 + 140 = 240
In the question we were asked to find the average cost. Remember the formular given above. thus we have;
AC = 240 / 200 = 1.2