The short-run average variable cost function indicates the incremental cost of producing the q + 1st unit of output given that we have already produced q units.

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The short-run average variable cost function indicates the average cost of producing each unit of output when the level of output is q, not the incremental cost of producing the q + 1st unit. The marginal cost function is used to determine the incremental cost of producing one more unit of output.

The Short-Run Average Variable Cost Function Indicates the Incremental Cost