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When Matt adds all his costs and divides them by the number of computers produced, he...

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.

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Given the average cost per computer is $800. However , there is a chance that the total cost function is reducing and the marginal cost for producing the laptop which she gifted her dad is $600. Then there might be a chance that the average cost might be $800 and still the marginal cost is $600 and with that she isn't losing any money on that computer.

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