Avoidable Cost

Definition

Health Economics

  • A cost that could be avoided by not producing the output of which it is a cost. Many costs are not avoidable - at least not quickly. For example, a contract with a supplier to supply an input for three years for an annual payment cannot (without further cost and/or loss) be avoided by ceasing to produce the good using the input. It usually costs something to avoid incurring a cost.
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