Average variable cost is an economics

Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

 term that refers to a firm's variable cost

Variable cost

Variable costs are expenses that change in proportion to the activity of a business. Variable cost is the sum of marginal costs over all units produced. It can also be considered normal costs. Fixed costs and variable costs make up the two components of total cost. Direct Costs, however,...

s (labor, electricity, etc.) divided by the quantity (Q) of output

Output

Output is the term denoting either an exit or changes which exit a system and which activate/modify a process. It is an abstract concept, used in the modeling, system design and system exploitation.-In control theory:...

 produced. Variable costs are those costs which vary with output.
Where:

• VC = Variable Cost
• AVC = Average Variable Cost
• Q = Quantity of Output Produced

Average variable cost plus average fixed cost equals average total cost:

Short run average variable cost equals the wage rate, w, divided by the average product of labor, AP_L