EC120 Lecture Notes - Lecture 6: Average Variable Cost, Variable Cost, Fixed Cost
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EC120 Full Course Notes
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Total cost (tc) total cost of producing any given level of output; can be divided into total fixed cost and total variable cost tc = tfc + tvc. Total fixed cost (tfc) all costs of production that do not vary with the level of output. Total variable cost (tvc) total costs of production that vary directly with the level of output. Average total cost (atc) total cost of producing a given output divided by the number of units of output; it can also be calculated as the sum of afc and avc. Atc = tc/q (total units of output) atc = afc + avc. Average fixed cost (afc) total fixed cost divided by the number of units of output afc = tfc/q (total units of output) Average variable cost (avc) total variable cost divided by the number of units of output avc = tvc/q (total units of output)
