LONG AND SHORT

RUN COST CURVE

Presented by #
Aman Negi & Ashish Kumar
n Negi & Ashish Kumar
Presented by #
###SHORT RUN
COST####
Short Run Cost is the cost price which has
short-term inferences in the
manufacturing procedures, i.e., these are
utilised over a short degree of end results.
These are the cost sustained once and
cannot be used again, such as payment of
wages, cost price of raw materials, etc.,
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SHORT RUN COST

FUNCTION

Total cost …….

Average cost …
Marginal cost ..
 Total cost refers to the overall cost of production,
which includes both fixed and variable components
Total cost… of the cost. In economics, the total cost is described
as the cost that is required to produce a product.

Total Cost = Total Fixed Cost + Total Variable Cost

Total Cost = (Average fixed cost + Average variable cost) * Number of

units
Fixed and variable cost..
5

Fixed cost: It is the cost that is constant. In other

words, these are the costs that remain the same,
irrespective of the number of units that are being
produced. For example, the lease for a building
or the rent for an apartment.

Variable cost: Variable cost is the cost that

changes (increases or decreases) based on the
number of goods produced by a company or the
service requirements of customers.
Presentation title 6

Total cost is always parallel to

variable cost

tc = vc + fc

fixed cost is constant so any

change in variable cost will
equally affect the total cost.
Average total Average total cost is referred to as the sum total of all production costs divided by the
cost.. total quantity of output. In other words, the average cost is the combination of total fixed
and variable costs, which is divided by the total number of units that are produced by the
firm.
AVG TOTAL cost = {FIXED COST + VARIABLE COST } / no. of units

Average fixed When the units of production increase, the average fixed cost per unit decreases.
cost.. Similarly, when the business produces less units, the average cost increases per unit.
Avg fixed cost = fixed cost / no. of units

Average the average variable cost is the variable cost per unit. Average variable cost is
variable cost… determined by dividing the total variable cost by the output.
Avg variable cost = variable cost / no. of units
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MARGINAL COST…. Marginal cost refers to

the increase or decrease in the cost of producing
one more unit.

 Marginal Cost = Change in Total Expenses / Change in Quantity of Units Produced • ”

No. of Output TVC TFC TC AFC=TFC/
workers Q
0 0 0 120 120 0
1 10 60 120 180 120/10=12

2 22 120 120 240 120/22=5.45

3 36 180 120 300 120/36=3.34

4 52 240 120 360 120/52=2.3.

5 70 300 120 420 120/70=1.71

6 86 360 120 480 120/86=1.39

7 100 420 120 540 120/100=1.2

0
8 112 480 120 600 120/112=1.0
7
9 122 540 120 660 120/0.98 9

10 130 600 120 720 120/0.92

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ATC MC

AVC

AFC
Presentation title 11
 LONG RUN
COST CURVE
Presentation title 13
 LONG RUN COST
 Long run refers to a period in which all the factors are variables.
 The existing size of the plant or building can be increased in case of the long
run.
 Long run costs vary with variation in the size of manufacturing plant or
organization.
Presentation title 15

PLAN FOR PRODUCT LAUNCH 

PLANNING MARKETING DESIGN STRATEGY LAUNCH

Deploy strategic
Disseminate Foster holistically
Synergize scalable Coordinate e- networks with
standardized superior
e-commerce business applications compelling e-
metrics methodologies
business needs
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TIMELINE

SEP 20XX NOV 20XX JAN 20XX MAR 20XX MAY 20XX

Synergize scalable Disseminate standardized Coordinate e- Foster holistically Deploy strategic

e-commerce business applications superior methodologies networks with
metrics compelling e-
business needs
 17

AREAS OF FOCUS
B2B MARKET SCENARIOS CLOUD-BASED OPPORTUNITIES

• Develop winning strategies to keep ahead • Iterative approaches to corporate strategy

of the competition • Establish a management framework from
• Capitalize on low-hanging fruit to identify the inside
a ballpark value
• Visualize customer directed convergence
Presentation title
HOW WE GET THERE
ROI
• Envision multimedia-based
expertise and cross-media
growth strategies
• Visualize quality intellectual
capital
• Engage worldwide
methodologies with web-
enabled technologies
NICHE MARKETS
• Pursue scalable customer
service through sustainable
strategies
• Engage top-line web
services with cutting-edge
deliverables
18
SUPPLY CHAINS
• Cultivate one-to-one
customer service with robust
ideas
• Maximize timely
deliverables for real-time
schemas
Presentation title 19

SUMMARY
At Contoso, we believe in giving 110%. By using our next-generation
data architecture, we help organizations virtually manage agile workflows.
We thrive because of our market knowledge and great team behind our
product. As our CEO says, "Efficiencies will come from proactively
transforming how we do business."
THANK YOU
Mirjam Nilsson​
mirjam@contoso.com
www.contoso.com