When Matt adds all his costs and divides them by the number of computers produced, he has an average cost per computer of $800. He offers a computer to his father for $600. His father hesitates because he does not want Matt to pay $200 of his computer. Matt says, “Don’t worry dad, I’m not losing money on the computer”. Explain how Matt might be telling the truth.

Answer rating: 100% (QA)

Matt might be telling the truth if he is considering the concept of average cost rather than the spe... View the full answer