Cost Curve - Short-run Average Variable Cost Curve (SRAVC)

Short-run Average Variable Cost Curve (SRAVC)

Average variable cost (which is a short-run concept) is the variable cost (typically labor cost) per unit of output: SRAVC = wL / Q where w is the wage rate, L is the quantity of labor used, and Q is the quantity of output produced. The SRAVC curve plots the short-run average variable cost against the level of output, and is typically drawn as U-shaped.

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