Average variable cost is
A)total cost minus fixed cost
B)total variable cost divided by the quantity of output
C)total cost plus marginal cost
D)total cost per unit of output
E)output divided by the quantity of inputs used

Question

Quizplus · Accepted Answer

Average variable cost is the total variable cost divided by the quantity of output. Total variable cost includes all the costs that vary with the level of output, such as raw materials, labor, and energy costs. This measure helps businesses determine the amount of cost per unit of output, which can help them make decisions about pricing, production levels, and resource allocation.

Average Variable Cost Is