Average fixed cost

In economics, average fixed cost (AFC) is the fixed costs of production (FC) divided by the quantity (Q) of output produced. Fixed costs are those costs that must be incurred in fixed quantity regardless of the level of output produced.

$AFC=\frac{FC}{Q}.$

Average fixed cost is a per-unit-of-output measure of fixed costs. As the total number of units of the good produced increases, the average fixed cost decreases because the same amount of fixed costs is being spread over a larger number of units of output.

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

$ATC=AVC+AFC$

See also

• Fixed cost
• Variable cost
• Cost curve