Average Fixed Cost (AFC) is defined as the total fixed cost per unit of output. It is calculated as AFC = TFC/q, where TFC is total fixed cost and q is the quantity of output.

Average Variable Cost (AVC) is defined as the total variable cost per unit of output. It is calculated as AVC = TVC/q, where TVC is total variable cost. Short Run Average Cost (SAC) is defined as the total cost per unit of output, calculated as SAC = TC/q.

These three average costs are related through the equation: SAC = AVC + AFC. This relationship holds because total cost (TC) equals the sum of total fixed cost (TFC) and total variable cost (TVC). When we divide TC = TVC + TFC by output (q), we obtain SAC = AVC + AFC. Thus, the short run average cost equals the sum of average variable cost and average fixed cost.