Cost Curves (Graphically)

There's two categories of cost curves we need to familiarize ourselves with:

  • Total cost curves (VC, FC, TC)
  • Per-unit cost curves (MC, AVC, AFC, ATC)

Let's go ahead and utilize the tables in Costs (Part 1) to dig into both these graphs!

Total cost curves

Total cost curves include VC, FC, and TC. We calculated these in the following table:

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If we were to graph these, they'd look like so!

The important thing to notice here is...

On the total cost curve, the difference between VC (Variable Cost) and TC (Total Cost) is always going to be the FC (Fixed Cost)!

In our case, our FC is $10, therefore VC and TC will always be $10 apart!

Outside of that... there's not much else we need to dig into with this graph. As long as you can recognize it on your exam, you should be in good shape.

Per-unit cost curves

Per-unit cost curves include MC, AVC, AFC, and ATC. We calculated these in the following table:

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