Final answer:
Various costs including average cost, variable costs, and marginal cost are measured on a per-unit basis. Average cost is total cost divided by output quantity, while marginal cost is the cost of producing one additional unit. Production technology encompasses the labor, equipment, and processes used to produce goods.
Step-by-step explanation:
Costs can be measured on a per-unit basis in a few different ways, average cost, average variable cost, variable costs, and marginal cost being among them. Fixed costs, while not usually expressed on a per-unit basis because they do not change with the level of output, can also be allocated per unit for analytical purposes.
Average cost (AC) is determined by dividing the total cost (TC) by the quantity (Q) of output produced. For example, if producing two widgets costs $44 in total, the average cost per widget would be $22. Marginal cost (MC) is the cost to produce one additional unit of output, calculated as the change in total cost (ATC) divided by the change in output (AQ). Using the previous example, if the cost of the first widget is $32.50 and two widgets cost $44, then the marginal cost of producing the second widget is $11.50.
Production technology refers to the mix of labor, equipment, processes, and technology that a firm uses to produce goods and services.