average variable cost

average variable cost
An average taken over a specified period of the variable cost of producing units of production (see average cost). The variable costs (such as the cost of raw materials, direct labour, machine time, etc. ) of producing a unit are those that vary directly with the number of units produced. As they are likely to change from time to time it may be convenient for budgeting purposes to take an average.

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  • Average variable cost — (AVC) is an economics term to describe the total cost a firm can vary (labor, etc.) divided by the total units of output.:frac{ ext{TVC{ ext{Output = ext{AVC}Where: * TVC = Total Variable Cost * AVC = Average Variable CostAverage variable cost… …   Wikipedia

  • Average fixed cost — (AFC) is an economics term to describe the total fixed costs (TFC) divided by the number of units produced. left ( frac{TFC}{Q} ight ) = AFC; TFC = total fixed cost, Q = quantity of units producedAverage variable cost plus average fixed cost… …   Wikipedia

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  • Cost curve — In economics, a cost curve is a graph of the costs of production as a function of total quantity produced. In a free market economy, productively efficient firms use these curves to find the optimal point of production (minimising cost), and… …   Wikipedia

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  • Cost-plus pricing with elasticity considerations — One of the most common pricing methods used by firms is cost plus pricing. In spite of its ubiquity, economists rightly point out that it has serious methodological flaws. It takes no account of demand. There is no way of determining if potential …   Wikipedia

  • Total cost — In economics, and cost accounting, total cost (or total costs) describes the total economic cost of production and is made up of variable costs, which vary according to quantity produced such as raw materials, plus fixed costs, which are… …   Wikipedia

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