average cost
Definition
Production cost per unit of output, computed by dividing the total of fixed costs and variable costs by the number of total units produced (total output). Lower average costs are a potent competitive advantage. Also called unit cost. Formula: (Fixed costs + Variable costs) ÷ Total output.
average cost is in the Accounting & Auditing and Industries, Manufacturing, & Technology subjects.
average cost appears in the definitions of the following terms:
above market cost,
pricing,
unit cost,
diseconomies of scale,
trade fair,
learning curve,
marginal cost,
dollar cost averaging,
monopolistic competition,
composite cost of capital
and
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