A ASSIGNMENT ON DIFFERENT KIND OF COST CURVE

Submitted to: Prof. jaydeep sir.

Submitted By:
CHAUHAN VIPUL MALANI ANKIT 132 133

WHAT ARE COSTS?

According to the Law of Supply:

Firms

are willing to produce and sell a greater quantity of a good when the price of the good is high.
results in a supply curve that slopes upward.

This

Fixed and Variable Costs

Average Costs
Average

costs can be determined by dividing the firms costs by the quantity of output it produces. The average cost is the cost of each typical unit of product.

Fixed and Variable Costs Average Costs

Average Total Costs (ATC) Average Variable Costs (AVC) Average Fixed Costs (AFC) Marginal Cost

 AVERAGE TOTAL COSTS (ATC)

Average Total Cost Curve is a U Shaped. It is the Sum of Average Fixed Cost and Average Variable Cost. Average Total Cost reflects Shapes of Both Average fixed cost and Average Variable cost.

Average Total Costs (ATC) is the Total cost (TC) divided by the number of units of output (q):

Average total cost (ATC)

is the total cost (TC) divided by the number of units of output (q):

AC=AFC+AVC
Cost

ATC
(Average Total Cost Curve)

OutPut

 AVERAGE VARIABLE COSTS (AVC)

Average variable cost (AVC) is the total variable cost divided by the number of units of output. Average variable cost is the average variable cost per unit of all the units being produced.

Average variable cost follows marginal cost, but lags behind.

Average variable cost (AVC)

Cost

AVC
(Average Variable Cost)

Output

Average fixed cost (AFC)

is the total fixed cost (TFC) divided by the number of units of output
(q):

AFC=TFC/Q. As more output is produced, the Average Fixed Cost decreases.

Cost

AFC
(Average Fixed Cost)

OutPut

 CONCLUSION
Average total cost is total cost divided by the quantity of output. Marginal cost is the amount by which total cost would rise if output were increased by one unit. The marginal cost always rises with the quantity of output. Average cost first falls as output increases and then rises.