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how to calculate the average variable cost. How to calculate average cost 1. Formula for Variable Costs.
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Average variable cost is calculated by dividing total variable cost VC by output Q. The average variable cost represents the total variable cost per unit including materials and labor in short-term production calculated by dividing total variables costs by total output. AVC VC Q In the above formula AVC.
How to calculate average cost 1.
To calculate average variable costs divide variable costs by Q. Firms use the AVC to determine at what point they should shut down production in the short. Average variable cost is calculated by dividing total variable cost VC by output Q. In economics average variable cost AVC is a firms variable costs labour electricity etc divided by the quantity of output produced.
