# What is Average Total Cost?

This post explains the concept of average total cost, its significance, and the way it is calculated. Read on to know more.

Rohan Bhalerao

Last Updated: Mar 22, 2019

Concept

Formula

*Average fixed cost = Total fixed cost / Quantity of output produced*

*Average variable cost = Total variable cost / Quantity of output produced*

*Average total cost = Average fixed cost + Average variable cost*

*Total cost / Quantity of output produced*. Now, when we plot the curve on a graph with the quantity of output produced on the x-axis and average total cost on the y-axis, we get a U-shaped curve.

*dTC / dQ*, where dTC is the change in total cost and dQ represents change in output.