In the short run, the average total cost is composed of which two components?

Multiple choice question for Costs , Supply And Perfect Competition. Select an option, then review the explanation below.

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Short-run opportunity costs and profitsShort-run variable costs plus profitsShort-run average variable costs combined with average fixed costsShort-run average variable costs and profit run average fixed costs

Explanation

The short-run average total cost is calculated by adding the short-run average variable costs to the short-run average fixed costs. This sum represents the total cost per unit of output in the short run.

Practice related questions from the same subject.

1.In the context of a perfectly competitive firm, what represents its short-run supply curve and its long-run supply curve respectively?
2.Under what condition will a firm cease production and produce nothing in the short term?
3.What is the relationship between marginal cost and average cost when the average cost is decreasing and when it is increasing?
4.What does it indicate when the long-run average cost curve slopes downward from left to right?
5.Which characteristic best describes a monopoly market structure?

In the short run, the average total cost is composed of which two components?

Explanation

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