--%>

Define Average Variable Cost

Define Average Variable Cost. And also state its formula.

E

Expert

Verified

Average Variable Cost (AVC): It is the product of firm’s total variable cost divided by the total number of units of product generated, or TVC/Q. This is per unit cost. Average variable cost is differentiated from average total cost in short run by the presence of fixed costs, or ATC – AVC = AFC. Illustrations of variable costs would comprise materials, energy, labor, and so on.

   Related Questions in Microeconomics

  • Q : Problem on market demand for toys

    Booming toy sales throughout December usually reflect rises in: (1) The quantity of toys demanded.  (2) Market demand for toys. (3) Production costs. (4) Infantile consumerism. Can someone please help me in finding out the acc

  • Q : Goals of the Firm-Profit Maximization

    The supposition that firms try to maximize the profits: (i) Is the beginning point for most of the economic analyses of how firms function. (ii) Can be wrong for the cases in which the professional corporate managers maximize their own self interests rather than the i

  • Q : Help In the quintile distribution of

    In the quintile distribution of income, the term "quintile" represents

  • Q : Transitivity Please provide me answer

    Please provide me answer of this question. What will be the implications for consumer's preferences and her indifference curves if the axiom of transitivity does not hold?

  • Q : Strategic Barriers to Entry The

    The successful employment of expensive marketing techniques through established competitors in an oligopoly: (w) encourages entry by other profit maximizing firms. (x) raises the minimum efficient scale of production for new entrants. (y) acts as a re

  • Q : Labor Union History-AFL-CIO merger

    Preceding to the AFL-CIO merger in the year1955: (i) The AFL was an alliance of the industrial unions. (ii) The CIO was alliance of the craft unions. (iii) Strikes over which the unions would symbolize workers were common. (iv) The union movement was limited to public

  • Q : Moral Hazard-Risk of money When you

    When you paid a friend’s entrance fee for the poker tournament and agreed to divide any winnings and then your friend played sloppily as your money is at risk, not his, and then you have suffered since of: (1) Adverse selection. (2) Fraudulent information. (3) I

  • Q : Concentration ratio Explain the concept

    Explain the concept of a concentration ratio.  Is the concentration ratio in a monopolistically competitive industry likely to be higher than for a perfectly competitive industry

  • Q : Resource market in equilibrium When the

    When the resource market demonstrated in this figure is into equilibrium: (1) owners of these resources currently receive no economic rents. (2) economic rent is specified from trapezoid Oade. (3) the rectangle Obde measures consumer surplus by the fi

  • Q : Demand curve facing each firm Question:

    Question: (1) Suppose the jeans industry is an oligopoly in which each firm sells its own distinctive brand of jeans, and each firm believes its rivals will not follow its price increases but will