Average Variable Cost (AVC) Homework Help
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Variable costs are those expenses which vary for the company depending on the number of units produced. Average variable cost on the other hand is the variable cost incurred by the company per a unit of production. For more details, go through Average Variable Cost (AVC) Homework Help .This in simple terms is calculated by dividing the entire variable costs by the total number of production units. The concept of AVC is highly utilized by firms seeking profit. The account of AVC is rather lucid. For detailed insights, go through Average Variable Cost (AVC) Homework Help.
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Aspects of AVC
1. Decides the feasible price: As discussed above, AVC shall determine the cost for unit production. So, if AVC is lower than the price at which a commodity is sold, then production should be continued as it is profit oriented. But if AVC is higher than the price of goods, clearly the company is unable to generate the money for the variable costs. Thus, production shall have to be stopped. For more information, go through Average Variable Cost (AVC) Homework Help.
2. AVC curve: The curve is plotted with X axis as the output and Y axis as the price of goods. The AVC curve is typically a ’U’ shaped curve. This signifies that the AVC shall decrease with an increase in production up to a certain point. This is a low point, after which the AVC goes on increasing with production. For a better understanding of the concepts, study Average Variable Cost (AVC) Homework Help.
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