Chapter Twenty-One Cost Curves
Chapter Twenty-One Cost Curves
Types of Cost Curves A total cost curve is the graph of a firm's total cost function. A variable cost curve is the graph of a firm's variable cost function. An average total cost curve is the graph of a firm's average total cost function
Types of Cost Curves A total cost curve is the graph of a firm’s total cost function. A variable cost curve is the graph of a firm’s variable cost function. An average total cost curve is the graph of a firm’s average total cost function
Types of Cost Curves An average variable cost curve is the graph of a firm's average variable cost function. An average fixed cost curve is the graph of a firm's average fixed cost function. A marginal cost curve is the graph of a firm's marginal cost function
Types of Cost Curves An average variable cost curve is the graph of a firm’s average variable cost function. An average fixed cost curve is the graph of a firm’s average fixed cost function. A marginal cost curve is the graph of a firm’s marginal cost function
Types of Cost Curves How are these cost curves related to each other? How are a firm's long-run and short- run cost curves related?
Types of Cost Curves How are these cost curves related to each other? How are a firm’s long-run and shortrun cost curves related?
Fixed.Variable Total Cost Functions F is the total cost to a firm of its short- run fixed inputs.F,the firm's fixed cost, does not vary with the firm's output level. c(y)is the total cost to a firm of its variable inputs when producing y output units.c(y)is the firm's variable cost function. cv(y)depends upon the levels of the fixed inputs
Fixed, Variable & Total Cost Functions F is the total cost to a firm of its shortrun fixed inputs. F, the firm’s fixed cost, does not vary with the firm’s output level. cv (y) is the total cost to a firm of its variable inputs when producing y output units. cv (y) is the firm’s variable cost function. cv (y) depends upon the levels of the fixed inputs
Fixed,Variable Total Cost Functions c(y)is the total cost of all inputs, fixed and variable,when producing y output units.c(y)is the firm's total cost function; c(y)=F+cy(y)
Fixed, Variable & Total Cost Functions c(y) is the total cost of all inputs, fixed and variable, when producing y output units. c(y) is the firm’s total cost function; c(y) = F + cv (y)
y $ F
cv(y)
y $ c v (y)
$ c(y)
y $ Fcv (y)
c(y) cv(y) c(y)=F+cy(y)
y $ Fcv (y) c(y) F c(y) = F + c v (y)