To calculate common variable cost (AVC) at every output level, divide the variable price at that stage through the complete product. You will get an common variable fee for each output level. For example, on the left at 5 workers, the VC of $5000 is divided by way of the TP of forty five to get an AVC of $111.
In Economics, the average variable fee is the variable cost per unit. Average variable price is decided by means of dividing the complete variable value by the output. The firms use the common variable value to determine when to end their manufacturing in the brief term.
The long-run common value of producing 19 units of output is $56, and the long-run common fee of producing 20 gadgets is additionally $56. These numbers imply that: lowering marginal productiveness is present. consistent returns to scale are present.
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