Principles of Microeconomics / Unit 6 MIC 0515 short lesson, about 20 seconds
Average Cost: Total, Variable, Fixed
Captions available
The idea
Average total cost is total cost over output; average variable cost, variable cost over output; average fixed cost, fixed cost over output. The first equals the other two added.
In practice
At fifty loaves, two hundred twenty dollars is four forty a loaf.
Where people slip
Average variable cost sits below average total cost by exactly average fixed cost, and the gap narrows as output grows.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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