In economics, AVC stands for Average Variable Cost, which is the total variable cost per unit of output. Variable costs are those costs that vary with the output, such as labor and electricity. The formula for AVC is VC/Q, where VC is the total variable cost and Q is the output. The average variable cost curve is U-shaped, initially declining and then rising as output increases. The minimum point of the AVC curve is where the AVC is equal to the marginal cost. A firm would choose to shut down if the price of its output is below the average variable cost at the profit-maximizing level of output, or if it sells at multiple prices, its average revenue is less than AVC.