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:
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—John Monks, Jr., U.S. screenwriter, Sy Bartlett, and Henry Hathaway. Robert Sharkey (James Cagney)
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