Examine a business owner's choice of whether or not to enter a market. How can a business owner decide how much to create using the marginal cost concept? How do production choices alter throughout the short- and long-term due to fixed costs? This effect is shown using the average-total-cost (ATC) model. The average cost per unit of output is the average total cost. Divide the total cost (TC) by the volume being produced by the company to determine it (Q).