Glossary · Micro · Production and costs

Average variable cost (AVC)

Variable cost per unit of output, . It sits below average total cost by exactly average fixed cost, and a firm shuts down in the short run if price falls below its minimum.

Also called: AVC

Taught in: Average and Marginal Cost

Related terms

Average total cost (ATC)Average fixed cost (AFC)Shutdown rule

More from production and costs

Average product of labor (APL)Cobb-Douglas production functionEconomies and diseconomies of scaleFixed cost (FC)IsoquantLaw of diminishing marginal returns

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