Average variable cost (AVC) is obtained by dividing total variable cost by the quantity produced. It shows how much each unit of output contributes to covering variable costs.
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Total Variable Cost: Total variable cost is the sum of all costs that vary with production levels.
Marginal Cost: Marginal cost represents the additional expense incurred from producing one more unit of output.
Average Fixed Cost (AFC): AFC is calculated by dividing total fixed cost by quantity produced. It shows how much each unit contributes towards covering fixed costs.