Average Total Cost

question 211

Multiple Choice

Average total cost:

• A) Increases in direct proportion to an increase in output.
• B) Is constant no matter what quantity of output is produced.
• C) Changes as a function of the next unit of output produced.
• D) Is the summation of all the expenses of a firm for a stated period of time.
• E) Is equal to the average fixed cost plus the average variable cost.

---

Definitions:

Marginal Cost

The financial commitment needed to produce an additional unit of a product or service.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits you could have received by taking an alternative action.

Movieplex

A modern movie theater complex featuring multiple screens within a single venue, allowing for the screening of various films simultaneously.

Coupon

A voucher or code that entitles the holder to a discount off a particular product or service, or a certificate of interest payment on a bond.