# AVC – Definition & Meaning

AVC stands for Average Variable Cost, which is a crucial economic concept used to analyze the cost structure of a company. It is an essential measure for understanding the cost of producing one unit of a product or service. The concept of AVC is widely used in economics, accounting, and finance. In this article, we will discuss the definition, origin, meaning, associations, synonyms, antonyms, and examples of AVC.

## Definitions

AVC is the cost of producing one unit of output, which varies with the level of production. It is calculated by dividing the total variable cost by the total output. In other words, it is the cost per unit of output that varies with the level of production.

## Origin

The origin of AVC can be traced back to the early 20th century when economists started to develop mathematical models to analyze the cost structure of firms. The concept of AVC was first introduced by the famous economist Alfred Marshall in his book Principles of Economics, published in 1890.

## Meaning in different dictionaries

AVC is defined as the cost of producing one unit of output that varies with the level of production. It is also known as the marginal cost of production. According to the Merriam-Webster dictionary, AVC is “the cost of producing one unit of output that varies with the level of production.” The Oxford English Dictionary defines AVC as “the cost of producing a unit of output that varies with the level of production.”

## Associations

AVC is associated with the concept of economies of scale, which refers to the cost advantages of producing at a larger scale. It is also associated with the concept of variable costs, which are costs that vary with the level of production.

## Synonyms

The synonyms of AVC include marginal cost, variable cost, and unit cost.

## Antonyms

The antonyms of AVC include fixed cost and total cost.

## The same root words

The same root words of AVC include average, variable, and cost.

## Example Sentences

Here are some example sentences that illustrate the use of AVC:

• The AVC of producing one unit of output is \$10.
• The company’s AVC decreases as the level of production increases.
• The AVC curve shows the relationship between the level of production and the cost per unit of output.
• The company needs to reduce its AVC to increase its profitability.
• The AVC of producing a product in-house is higher than outsourcing it to a third-party supplier.