Question

The average cost of production is __________.

• A. the sum of the variable cost of production and the fixed cost of production, divided by the quantity produced
• B. the sum of the average variable cost of production and the average fixed cost of production
• C. the firm's total cost of production divided by the quantity produced
• D. all of the above

Answer 1

The correct option is D all of the above

A firms average cost can be calculated in 3 ways-

Average Cost ($AC$) = $\frac{TC}{Qty}$, which can be also written as $AC$ = $\frac{FC+VC}{Qty}$

Also, $AC$ = $AFC+AVC$