The Average Total Cost of Production

question 60

Multiple Choice

The average total cost of production

• A) is the extra cost required to produce one more unit.
• B) equals the explicit cost of production.
• C) equals total cost of production divided by the level of output.
• D) equals total cost of production multiplied times the level of output.

---

Definitions:

Consumer Surplus

The discrepancy between the total sum consumers are prepared and capable of paying for a good or service, and the total sum they end up paying.

Profit Maximize

The method through which a company identifies the optimal pricing and production volume to maximize its profits.

Output

Output is the total amount of goods or services produced by a company, sector, or economy within a certain period, indicating the level of productivity and capacity utilization.

Monopoly

A market structure characterized by a single seller who has exclusive control over the supply of a good or service, and where there are high barriers to entry for potential competitors.