Average variable cost is
A)the change in cost as output decreases
B)the change in cost as output increases
C)TC / quantity of output
D)TVC / quantity of output
E)AFC + AVC

Question

Quizplus · Accepted Answer

Average variable cost (AVC) is calculated as total variable cost (TVC) divided by the quantity of output. So, option D is correct. Option A is about marginal cost, option B is incorrect because it talks about change in cost with increase in output while AVC is about the average cost, options C and E are about average total cost (ATC) not average variable cost (AVC).

Average Variable Cost Is