ECONOMICS

Detailed explanation-1: -In Economics, the average variable cost is the variable cost per unit. Average variable cost is determined by dividing the total variable cost by the output. The firms use the average variable cost to determine when to stop their production in the short term.

Detailed explanation-2: -Examples of variable costs are sales commissions, direct labor costs, cost of raw materials used in production, and utility costs.

Detailed explanation-3: -Variable costs are the sum of all labor and materials required to produce a unit of your product. Your total variable cost is equal to the variable cost per unit, multiplied by the number of units produced. Your average variable cost is equal to your total variable cost, divided by the number of units produced.

Detailed explanation-4: -Average variable cost (AVC) is the variable cost per unit of total product (TP). To calculate AVC, divide variable cost at a given total product level by that total product. This calculation yields the cost per unit of output. AVC tells the firm whether the output level is potentially profitable.

Detailed explanation-5: -Average variable cost (AVC) is the variable cost per unit given a certain level of production (Q). It can be found by dividing the total variable cost (TVC) by the quantity produced or subtracting the average fixed cost (AFC) from the average total cost (ATC).