Marginal Cost, Average Variable Cost and Average Total Cost Curves    It's often convenient to show the MC, AVC, and ATC curves on the same graph, as we have done the right. Notice that the MC curve crosses AVC and ATC at their respective minimums.

   We usually don't show the AFC curve because all the information in the fixed cost curve is contained in the graph to the right. Remember that ATC = AVC + AFC. This means that AFC = ATC - AVC, so the vertical distance between ATC and AVC is always AFC.

Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved