JAMB - Economics (2014 - No. 12)
Given that FC = N500, VC = N1,500, and Q = 50 units. Find the average cost of the product.
N30
N40
N10
N20
Explicació
The Average Cost is the per unit cost of production obtained by dividing the total cost (TC) by the total output (Q). Thus we have;
Average cost = Total cost ÷ Total output(quantity)
Total cost = fixed cost + variable cost
Average cost = 500 + 1500 ÷ 50
2000 ÷ 50 = 40