Average fixed cost

Average fixed cost (AFC) is an economics term that refers to fixed costs of production (FC) divided by the quantity (Q) 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 goods 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