Google
Thursday 
December 2, 2021 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
A POSTERIORI: A conclusion reached through logical reasoning based on facts and observations about the real world. This notion is closely related to the scientific verification of hypotheses and the identification of principles. A similar sounding, but opposite term is a prior, which is a unverified presumption made before an analysis is undertaken. For example, in the study of economics of crime you might assume, a priori, that people are basically "good", and conclude, a posteriori, that people are more likely to commit crimes when the threat of capture and conviction is lower.

Visit the GLOSS*arama


VARIABLE COST:

In general, cost that changes with changes in the quantity of output produced. More specifically, variable cost is combined with the adjectives "total" and "average" to indicate the overall level of variable cost or the per unit variable cost. Variable cost depends on the amount produced. If there is no production, then there is no variable cost.
Variable cost is cost that depends on the quantity produced. If production is greater, then variable cost is greater. Variable cost is affected by short-run production principles, especially the law of diminishing marginal returns.

Variable Inputs

Variable cost usually includes the cost of using variable inputs, assorted resources that are variable in the short run, especially labor and material inputs. However, in practice, variable cost includes any and all cost that varies with the quantity of output.

For example, Waldo's TexMex Taco World operates in the short run with labor (the workers) as a variable input and capital (the restaurant and equipment) as a fixed input. In this case, the cost associated with labor is a prime candidate to be a variable cost. This includes hourly wage payments to the workers and any fringe benefits paid on behalf of the workers.

While labor is usually isolated as THE variable input in the short run, most short-run production has other variable inputs, too. Waldo's TexMex Taco World undoubtedly has an assortment of other variable inputs, all of which are part of variable cost--including meat, lettuce, sour cream, and jalapenos that make up the tacos; paper napkins, packaging material, and plastic utensils that customers use when consuming the tacos; and electricity and other energy sources needed to prepare the tacos. When Waldo's make more tacos, they incur a greater cost for these inputs.

Total and Average

The two most common manifestations of variable cost are total variable cost and average variable cost.
  • Total Variable Cost: This is the total amount of variable cost incurred in the production of a good. It combines all variable opportunity cost.

  • Average Variable Cost: This is the per unit variable cost, which is calculated by dividing total variable cost by the quantity of output produced.

<= VALUE IN USEVARIABLE INPUT =>


Recommended Citation:

VARIABLE COST, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2021. [Accessed: December 2, 2021].


Check Out These Related Terms...

     | fixed cost | total variable cost | total variable cost curve | average variable cost | average variable cost curve | total cost | total cost curve | total fixed cost | total fixed cost curve | average cost | average total cost | marginal cost |


Or For A Little Background...

     | opportunity cost | fixed input | production inputs | production | production cost | business | factors of production | microeconomics | short-run production analysis | law of diminishing marginal returns | marginal returns | marginal analysis |


And For Further Study...

     | average fixed cost | total cost and marginal cost | total cost curves | total variable cost and total product | legal business organizations | firm objectives | opportunity cost, production possibilities | profit | normal profit | profit maximization |


Search Again?

Back to the WEB*pedia


APLS

BROWN PRAGMATOX
[What's This?]

Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors looking to buy either a dozen high trajectory optic orange golf balls or a large red and white striped beach towel. Be on the lookout for neighborhood pets, especially belligerent parrots.
Your Complete Scope

This isn't me! What am I?

During the American Revolution, the price of corn rose 10,000 percent, the price of wheat 14,000 percent, the price of flour 15,000 percent, and the price of beef 33,000 percent.
"A ship ought not to be held by one anchor, nor life by a single hope. "

-- Epictetus, philosopher

ADR
American Depositary Receipt, Asset Depreciation Range
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2021 AmosWEB*LLC
Send comments or questions to: WebMaster