For example, assume that a textile company incurs a production cost of $9 per shirt, and it produced 1,000 units during the last month. The company also pays a rent of $1,500 per month. The total cost includes the variable cost of $9,000 ($9 x 1,000) and a fixed cost of $1,500 per month, bringing the total cost to $10,500. 4. Average cost
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