Which term is the same as average cost (total cost divided by output)?

Which term is the same as average cost (total cost divided by output)?

• A. Skimming
• B. Unit costs
• C. Distribution
• D. Intermediaries

Answer: (B)

Average cost is the cost per unit of output, calculated by dividing total cost by the quantity produced. The term that matches this per-unit measure is unit costs. In practice, unit cost is simply another way of saying the average cost per unit, so it’s used to understand how much each unit costs to make. For example, if total cost is £1,000 and 200 units are produced, the average cost per unit is £5, which is described as the unit cost. The other terms listed don’t describe cost per unit: skimming refers to copying text with little detail, distribution is about getting products to customers, and intermediaries are middlemen in the supply chain.

Average cost is the cost per unit of output, calculated by dividing total cost by the quantity produced. The term that matches this per-unit measure is unit costs. In practice, unit cost is simply another way of saying the average cost per unit, so it’s used to understand how much each unit costs to make.

For example, if total cost is £1,000 and 200 units are produced, the average cost per unit is £5, which is described as the unit cost. The other terms listed don’t describe cost per unit: skimming refers to copying text with little detail, distribution is about getting products to customers, and intermediaries are middlemen in the supply chain.