Fuel saving device: Difference between revisions

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In [[economics]], '''average variable cost''' (AVC) is a firm's [[variable cost]]s (labor, electricity, etc.) divided by the quantity (Q) of [[output]] produced. Variable costs are those costs which vary with output.  
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:<math>\text{AVC} = \frac{\text{VC}}{\text{Q}}</math>
where VC = variable cost, AVC = average variable cost, and Q = quantity of output produced.
 
Average variable cost plus [[average fixed cost]] equals [[average total cost]]:
:<math>\text{AVC} + \text{AFC} = \text{ATC}.</math>
 
In many or most contexts, average variable cost declines as the level of output increases at low levels of output, and then bottoms out and begins increasing as output increases further. Hence the curve depicting average variable cost is roughly U-shaped.
 
==See also==
*[[Variable cost]]
*[[Fixed cost]]
*[[Cost curve]]
 
[[Category:Costs]]
 
{{economics-stub}}

Revision as of 17:44, 24 February 2014

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