Average Cost

In economics, average cost or unit cost is equal to total cost divided by the number of goods produced (the output quantity, Q). It is also equal to the sum of average variable costs (total variable costs divided by Q) plus average fixed costs (total fixed costs divided by Q). Average costs may be dependent on the time period considered (increasing production may be expensive or impossible in the short term, for example). Average costs affect the supply curve and are a fundamental component of supply and demand.

Read more about Average CostShort-run Average Cost, Long-run Average Cost, Relationship To Marginal Cost, Relationship Between AC, AFC, AVC and MC

Other articles related to "average, cost, average cost, costs":

Stock Management - Retail Supply Chain - Weighted Average Price Method
... beginning of period ADD Stock purchased during the period AVERAGE total cost by total qty to arrive at the Average Cost of Goods for the period ... This Average Cost Price is applied to all movements and adjustments in that period ... Multiplying the stock balance in qty by the Average cost gives the Stock cost at the end of the period ...
Components of Economic Costs
... Total cost (TC) Total Cost equal fixed cost plus variable costs ... Variable cost (VC) Variable costs are the costs paid to the variable input ... Total variable cost (TVC) or (VC) total variable costs is the same as variable costs ...
Cost Price - Forms - Average Cost - Moving Average Cost
... Moving average cost (MAC) is a slight permutation of the above, with the average being calculated from the previous average and new price ...
Average Cost - Relationship Between AC, AFC, AVC and MC
... The Average Fixed Cost curve (AFC) starts from a height and goes on declining continuously as production increases ... The Average Variable Cost curve, Average Cost curve and the Marginal Cost curve start from a height, reach the minimum points, then rise sharply and continuously ... The Average Fixed Cost curve approaches zero asymptotically ...
Experience Curve Effects - Learning Curve and Learning Curve Effect
... each doubling of the total quantity of items produced, costs decrease by the same proportion, as described by Equations 1 and 2 ... In this equation, Y represents the cost of a specified unit in a production run ... For example, If a production run has generated 200 units, the total cost can be derived by taking the equation below and applying it 200 times (for units 1 to 200) and then ...

Famous quotes containing the words cost and/or average:

    I favor the policy of economy, not because I wish to save money, but because I wish to save people. The men and women of this country who toil are the ones who bear the cost of the Government. Every dollar that we carelessly waste means that their life will be so much the more meager. Every dollar that we prudently save means that their life will be so much the more abundant. Economy is idealism in its most practical terms.
    Calvin Coolidge (1872–1933)

    Since the Civil War its six states have produced fewer political ideas, as political ideas run in the Republic, than any average county in Kansas or Nebraska.
    —H.L. (Henry Lewis)