Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
$5
B
$10
C
$50
D
$100
Understanding the Answer
Let's break down why this is correct
Answer
To find the average total cost per unit, you need to divide the total cost by the number of units produced. In this case, the firm has a total cost of $500 and produces 100 units. So, you would calculate the average total cost by taking $500 and dividing it by 100. This gives you an average total cost of $5 per unit. This means that, on average, it costs the firm $5 to produce each individual unit of the product.
Detailed Explanation
To find the average cost per unit, divide the total cost by the number of units. Other options are incorrect because This answer might come from thinking the total cost is split in a different way; This could happen if someone mistakenly thinks the total cost is the average cost.
Key Concepts
Average Total Cost
Topic
Calculating Average Total Cost
Difficulty
easy level question
Cognitive Level
understand
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