Final answer:
Average Total Cost (ATC) is calculated as the sum of Average Fixed Cost (AFC) and Average Variable Cost (AVC), represented by ATC = AFC + AVC. The ATC curve is typically U-shaped, different from the AVC and MC curves.
Step-by-step explanation:
The student's question asks for the correct way to calculate Average Total Cost (ATC) in economics. The ATC can be defined as the sum of Average Fixed Cost (AFC) and Average Variable Cost (AVC). This can be represented as ATC = AFC + AVC. Calculating the ATC involves dividing the total cost (the sum of fixed and variable costs) by the total quantity produced. We can see that this is in line with option a) provided in the question. The ATC curve is typically U-shaped. On the other hand, Average Variable Cost (AVC) is found by dividing the variable cost by the quantity produced and also tends to have a U-shaped curve, while the Marginal Cost (MC) is computed by examining the change in total cost between two levels of output and dividing by the change in output, resulting in an upward-sloping MC curve.