Average variable cost
In economics, average variable cost (AVC) is a firm's variable costs (VC; labour, electricity, etc.) divided by the quantity of output produced (Q): A V C = V C Q {\displaystyle AVC={\frac {VC}{Q}}} Average variable cost plus average fixed cost equals average total cost (ATC): A V C + A F C = A T C . {\displaystyle AVC+AFC=ATC.} A firm would choose to shut down if the price of its output is below average variable cost at the profit-maximizing level of output (or, more generally if it sells at multiple prices, its average revenue is less than AVC).