Share This Article:

Economic Definition of perfect competition average factor cost. Defined.

Offline Version: PDF

Term perfect competition average factor cost Definition: Total factor cost per unit of factor input employed by a perfectly competitive firm in the production of output, found by dividing total factor cost by the quantity of factor input. Average factor cost, abbreviated AFC, is generally equal to the factor price. However, using the longer term average factor cost makes it easier to see the connection to related terms, including total factor cost and marginal factor cost.

 

« monopsony average factor cost | average fixed cost »

Permalink: https://glossary.econguru.com/economic-term/average+factor+cost,+perfect+competition

Alphabetical Reference to Over 2,000 Economic Terms