Costs

Question 1

How do you calculate Average total cost/unit cost

Answer 1

ATC= total cost divided by units of output

Question 2

How do you calculate AFC/AVC cost

Answer 2

FC/VC divided by output produced

Question 3

What is marginal cost

Answer 3

The additional cost of producing one more unit

Old total cost minus new total cost

Question 4

Whats the difference between fixed and variable costs

Answer 4

Fixed costs don’t change with output produced eg rent, business rates (tax)