7 SR Cost Curves
Categorize the cost term with Totals and Q output.
=Q*AFC
Stands for Total Cost
Is related to things such as labor.
=TFC/AFC
=TC/ATC
Stands for Total Fixed Cost
=Sum of TFC and TVC
Is constant
=Q*AVC
=Q*ATC
=TVC/AVC
Is a subcomponent of TC that increases as Q increases.
=All costs of these type DO NOT change.
=All Costs at a given output.
Stands for Total Variable Cost
=TFC+TVC
TFC
TVC
TC
Qoutput
Categorize the Average Cost Terms and Marginal Cost
=Δ TVC / Δ Q
Stands for Average Total Cost
=ATC-AVC
=TFC / Q
ALWAYS falls as Q rises.
=Sum of two average costs that first falls then rises.
=ATC-AFC
=Variable Cost PER UNIT OF OUTPUT
Stands for Average Fixed Cost
=Fixed Cost PER UNIT OF OUTPUT
=AFC+AVC
=TC/Q
=Change in TVC from an extra unit of output.
=TVC / Q
Stands for Average Variable Cost
=Δ TC / Δ Q
=Total Cost PER UNIT OF OUTPUT.
Is a subcomponent of ATC that first falls then rises.
=Change in the firm's TC when it produces another unit of output.
Stands for Marginal Cost
AFC
AVC
ATC
MC