Dana is watching television when a commercial for a brand of bathroom cleaner comes on. She is not very interested in the produc
1 answer:
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Answer:
a. Average total cost minus average fixed cost.
Explanation:
- Total cost of production (TC) can be expressed as the sum of two elements: total fixed cost (F) -those cost that do not vary with output level - and total variable cost (V) - which are those cost that vary with the level of production.
- Average total cost (ATC) is simply the division of total cost by the output produced (Q):
.
- Average variable cost (AVC) is the division of variable cost by the output produced:
.
- Then, average variable cost can be obtained by :
- dividing the total variable cost by output (option c) or
- subtracting to average total cost the fixed average cost (
), (option a).