Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
$2
B
$4
C
$5
D
$10
Understanding the Answer
Let's break down why this is correct
Answer
The Average Total Cost (ATC) is found by dividing the Total Cost (TC) by the quantity of units produced. In this case, if the Total Cost is $200 and you produced 50 units, you would calculate the ATC by taking $200 and dividing it by 50. So, when you do the math, $200 divided by 50 equals $4. This means the Average Total Cost for each unit produced is $4. Thus, every unit costs an average of $4 to produce.
Detailed Explanation
To find the Average Total Cost, divide the Total Cost by the number of units. Other options are incorrect because This answer suggests that each unit costs only $2; This answer implies that each unit costs $5.
Key Concepts
Total Cost
Topic
Calculating Average Total Cost
Difficulty
easy level question
Cognitive Level
understand
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