Average Total Cost (ATC)

Definition

ATC refers to the average cost of producing each unit of output. It is calculated by dividing total cost by the quantity produced.

Related terms

Marginal Cost (MC): MC represents the additional cost incurred when producing one more unit of output.

Fixed Costs (FC): FC are expenses that do not change with changes in production levels, such as rent or salaries.

Variable Costs (VC): VC are expenses that vary with changes in production levels, such as raw materials or labor costs.