Question

T its current output level, Pretty Flowers Florist has average fixed costs equal to $4.40 and average variable costs equal to $2.20. What is Pretty Flowers Florist's average total cost at their current output level?

$6.00
$2.20
$6.60
$4.40

Answer 1

The average total cost at Pretty Flowers Florist's current output level is $6.60.

Step-by-step explanation:

The average total cost is equal to the sum of average fixed cost and average variable cost. From the given information, average fixed cost is $4.40 and average variable cost is $2.20. Therefore, the average total cost at Pretty Flowers Florist's current output level is $4.40 + $2.20 = $6.60.

Answer 2

Pretty Flowers Florist's average total cost at their current output level equals $6.60

Average total cost (ATC) refers to the average cost incurred by a business or organization to produce each unit of a product or provide a service.

It is calculated by dividing the total cost by the quantity produced or serviced.

Given data: AFC = 4.40 & AVC = 2.20

Average Total Cost (ATC) = Average Fixed Costs (AFC) + Average Variable Costs (AVC)

ATC = $4.40 + $2.20

ATC = $6.60.

Therefore, the Option C is correct.