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In economics, average variable cost (AVC) is a firm's variable costs (labour, electricity, etc.) divided by the quantity of output produced. Variable costs are those costs which vary with the output level: where = variable cost, = average variable cost, and = quantity of output produced. Average variable cost plus average fixed cost equals average total cost: As a result, the firm's short-run supply curve has output of 0 when the price is below the minimum AVC and jumps to output such that for higher prices, where .

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