57.Relation between AVERAGE VARIABLE COST & AVERAGE PRODUCT|Theory of Cost [Most Important Relation]
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In economics, average variable cost (AVC) is a firm's variable costs (labour, electricity, etc.) divided by the quantity of output produced. Variable costs are those costs which vary with the output level:
AVC = VC/Q
where AVC= average variable cost,
VC= variable cost
Q= quantity of output produced.
Average variable cost plus average fixed cost equals average total cost:
ATC = AVC + AFC
Relationship between average variable cost and average product. Therefore, AVC is inversely related to AP, i.e., when AP increases, AVC decreases. When AP is maximum, AVC attains its minimum point and when AP decreases, AVC increases.
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In economics, average variable cost (AVC) is a firm's variable costs (labour, electricity, etc.) divided by the quantity of output produced. Variable costs are those costs which vary with the output level:
AVC = VC/Q
where AVC= average variable cost,
VC= variable cost
Q= quantity of output produced.
Average variable cost plus average fixed cost equals average total cost:
ATC = AVC + AFC
Relationship between average variable cost and average product. Therefore, AVC is inversely related to AP, i.e., when AP increases, AVC decreases. When AP is maximum, AVC attains its minimum point and when AP decreases, AVC increases.
_____________________________________________
ABOUT ECONOMICS PEDIA: We here at Economics Pedia are to provide you with complete guidance and support regarding all types of competitive examinations with main focus on subject “Economics”, across the country and abroad. We also try to capture the issues and policies impact on economy.
For more update:
SUBSCRIBE to Economics Pedia
Follow us:
https://www.facebook.com/ecoknowmicsp...
Instagram: ecoknowmicspedia
Twitter: EconomicsPedia
Whatsapp contact: 9051981561
Mail us at:
[email protected]
4 سال پیش
در تاریخ 1399/09/19 منتشر شده
است.
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