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Homework answers / question archive / If the average total cost is $20 and the marginal cost is $40, with a quantity produced of 2000, what is the total cost?

If the average total cost is $20 and the marginal cost is $40, with a quantity produced of 2000, what is the total cost?

Accounting

If the average total cost is $20 and the marginal cost is $40, with a quantity produced of 2000, what is the total cost?

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We know that the average total cost is calculated as:

ATC=TCQATC=TCQ

where TCTC is the total cost and QQ is the quantity produced.

In our question, the average total cost is ATC=$20ATC=$20 and the quantity produced is Q=2000Q=2000. Therefore:

$20=TC2000TC=$20×2000TC=$40,000

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