Correct Answer: Option C

Explanation

Average cost = total cost / output (quantity)

since total cost is not given in the diagram, we have to derive it. its gotten as;

Total cost = fixed cost + variable cost

TC = 100 + 140 = 240

In the question we were asked to find the average cost. Remember the formular given above. thus we have;

AC = 240 / 200 = 1.2

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