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The Average Propensity to Consume (APC) is an economic concept that measures the proportion of income an individual or a group of individuals spends on consumption, on average. It is calculated by dividing total consumption expenditure by total income.

Mathematically, the formula for Average Propensity to Consume (APC) is:

APC = Total Consumption Expenditure / Total Income

The APC represents the percentage or fraction of income that is devoted to consumption. It indicates the propensity or inclination of individuals to spend their income rather than save it. A higher APC suggests a greater propensity to consume, while a lower APC indicates a higher tendency to save.

The APC is often used in the context of Keynesian economics and the theory of aggregate demand. According to John Maynard Keynes, when individuals have a higher APC, it leads to a higher overall level of consumption, which in turn stimulates economic activity and demand. This relationship is an important component of Keynesian theories on fiscal policy and the role of consumption in driving economic growth.

The Average Propensity to Consume can vary among individuals, groups, or countries based on factors such as income levels, cultural norms, economic conditions, and government policies. It provides insights into consumer behavior and helps economists and policymakers understand patterns of spending and saving within an economy.