Averages cost (AC) equal to

Analyze the question: The question asks for the formula for Average Cost (AC). The options appear to have lost their division signs in formatting, so they read "TCQ" and so on.

Concept: Average cost is the cost per unit of output. It is found by dividing Total Cost (TC) by the quantity produced (Q).

AC = TC ÷ Q

Step by step:

1. Total cost (TC) = Total Fixed Cost (TFC) + Total Variable Cost (TVC).
2. Average cost is the cost of producing one unit, so we share the total cost across all units: AC = TC / Q.
3. This is the same as AFC + AVC, since TFC/Q + TVC/Q = (TFC + TVC)/Q = TC/Q.

Checking the other options:

• A. AC TC: this is not a valid formula.
• B. TC AC: this is probably TC ÷ AC, which gives Q, not AC.
• C. TC AVC: this is probably TC ÷ AVC, which is not AC.
• D. TC MC: this is probably TC ÷ MC, which is also not AC.
• E. TC Q: this is TC ÷ Q, which is the correct formula for AC.

**Answer: E.

Tip: "Average" always means "total divided by number of units." So AC = TC/Q, AFC = TFC/Q, and AVC = TVC/Q. Also remember that MC = change in TC ÷ change in Q, which is a different thing.