Average variable costs equal
A) total variable costs divided by marginal costs.
B) total variable costs divided by output.
C) the change in marginal costs from producing another unit of output.
D) output divided by the change in total costs.

Question

Quizplus · Accepted Answer

Average variable costs (AVC) are calculated by dividing total variable costs (TVC) by the level of output. This gives an average cost of producing each unit of output. AVC can also be used to determine the minimum price that a firm must receive to cover its variable costs.

Average Variable Costs Equal