What is the average total cost when the output is 200 units in the table above is

  • A N1.00
  • B N2.0
  • C N1.20
  • D N2.40
jamb 1998economics

The correct answer is C. N1.20

Average total cost is the total cost divided by the quantity of output. Total cost is the sum of fixed cost and variable cost.

In the table, the fixed cost is N100 for all levels of output, and the variable cost is N140 when the output is 200 units. So, the total cost is N100 + N140 = N240.

The average total cost is then N240 / 200 = N1.20.

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