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In economics, average cost or unit cost is equal to total cost divided by the number of units of a good produced :
A C = T C Q . {\displaystyle AC={\frac {TC}{Q}}.}
Average cost has strong implication to how firms will choose to price their commodities. Firms’ sale of commodities of certain kind is strictly related to the size of the certain market and how the rivals would choose to act.
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