Average fixed cost (AFC) is an economics term that refers to fixed costs of production (FC) divided by the quantity (Q) of output produced.
Average fixed cost is a per-unit-of-output measure of fixed costs. As the total number of goods produced increases, the average fixed cost decreases because the same amount of fixed costs is being spread over a larger number of units of output.
Average variable cost plus average fixed cost equals average total cost.
Famous quotes containing the words average, fixed and/or cost:
“Japanese food is very pretty and undoubtedly a suitable cuisine in Japan, which is largely populated by people of below average size. Hostesses hell-bent on serving such food to occidentals would be well advised to supplement it with something more substantial and to keep in mind that almost everybody likes french fries.”
—Fran Lebowitz (b. 1975)
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—Michel de Montaigne (1533–1592)
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—Oscar Wilde (1854–1900)