ECONOMICS

Detailed explanation-1: -We can calculate the average cost by dividing the total cost by the total output quantity. Average Cost equals the per-unit cost of production which is calculated by dividing the total cost by the total output. Total cost means the sum of all costs, including the fixed and variable costs.

Detailed explanation-2: -Average cost (AC), also known as average total cost (ATC), is the average cost per unit of output. To find it, divide the total cost (TC) by the quantity the firm is producing (Q). Average cost (AC) or average total cost (ATC): the per-unit cost of output.

Detailed explanation-3: -ATC = TC / Q This concludes the topic on Average total cost formula, which is a very important concept for making pricing decisions in a business.

Detailed explanation-4: -Unit cost is determined by combining the variable costs and fixed costs and dividing by the total number of units produced.

Detailed explanation-5: -Average total cost (sometimes referred to simply as average cost) is total cost divided by the quantity of output. Since the total cost of producing 40 haircuts is $320, the average total cost for producing each of 40 haircuts is $320/40, or $8 per haircut.