The average total cost of producing 6 Giga plots at Jimmy's Giga plot factory is $22.17.
In economics, the average cost also referred to as the unit cost, is computed by dividing the total cost (TC) by the quantity of a good produced (the output Q): AC = TC/Q
The average cost has a significant impact on how businesses set their product prices. Businesses' sales of commodities are directly correlated with the size of the relevant market and the tactics used by rivals.
With cost on the vertical axis and quantity on the horizontal axis, an average cost curve can be drawn. These graphs frequently include display marginal costs, which are the costs of the last unit produced at each point, and, in the short run, indicate the slope of the curve of variable costs (and hence the first derivative of variable cost).
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