Average variable cost (AVC) is an economics term that refers to a firm's variable costs (labor, electricity, etc.) divided by the quantity (Q) of output produced. Variable costs are those costs which vary with output.
Where:
- VC = Variable Cost
- AVC = Average Variable Cost
- Q = Quantity of Output Produced
Average variable cost plus average fixed cost equals average total cost:
Short run average variable cost equals the wage rate, w, divided by the average product of labor, APL
Famous quotes containing the words average, variable and/or cost:
“Public opinion, a vulgar, impertinent, anonymous tyrant who deliberately makes life unpleasant for anyone who is not content to be the average man.”
—W.R. (William Ralph)
“There is not so variable a thing in nature as a lady’s head-dress.”
—Joseph Addison (1672–1719)
“It is not enough for theory to describe and analyse, it must itself be an event in the universe it describes. In order to do this theory must partake of and become the acceleration of this logic. It must tear itself from all referents and take pride only in the future. Theory must operate on time at the cost of a deliberate distortion of present reality.”
—Jean Baudrillard (b. 1929)