Suppose Rob is currently producing 1,000 hamburgers per month at a total cost of $100.
What is his average total cost of production?
Average Cost of Production:
Producers have the role of determining the cost of production to ascertain whether the organization is running at a profit or loss. Notably, the production cost should be maintained at its lowest possible levels.
Answer and Explanation: 1
The Average Total Cost (ATC) of production refers to the average cost per unit produced.
The formula is
ATC= Total Cost (TC) / Total Quantity produced (TQ).
In this case,
TQ= 1000 hamburgers
ATC= 100/ 1000
The average costs of producing one hamburger is $0.1
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fromChapter 3 / Lesson 23
Learn what is the average total cost. Learn its use, its formula, and how to apply it.