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Production And Costs

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Short Run Costs

Shapes of TFC, TVC and TC Curves:



  1. TFC curve is horizontal and parallel to X-axis because TFC remains constant at all levels of output.
  2. TVC curve is positively sloped depicting upward movement to the right which shows as output increases, TVC also increases.
  3. TC curve is the vertical summation of total fixed cost curve and total variable cost. 

Shapes of AC, MC, AVC and AFC Curves:


In the figure,
Shape of AFC curve is downward sloping curve from left to right because average fixed cost goes on falling with every increase in output. On the other hand, MC, AC and AVC curves are U-shaped because of law of variable proportion. AVC, ATC and MC curves fall up to a point and then start rising. MC curve intersects AC and AVC at their minimum point.  

Shapes of the Short Run Cost Curves

Shapes of TFC, TVC and TC Curves:



  1. TFC curve is horizontal and parallel to X-axis because TFC remains constant at all levels of output.
  2. TVC curve is positively sloped depicting upward movement to the right which shows as output increases, TVC also increases.
  3. TC curve is the vertical summation of total fixed cost curve and total variable cost. 

Shapes of AC, MC, AVC and AFC Curves:


In the figure,
Shape of AFC curve is downward sloping curve from left to right because average fixed cost goes on falling with every increase in output. On the other hand, MC, AC and AVC curves are U-shaped because of law of variable proportion. AVC, ATC and MC curves fall up to a point and then start rising. MC curve intersects AC and AVC at their minimum point.  

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