In economics, a cost curve is a graph of the costs of production as a function of total quantity produced. In a free market economy, productively efficient firms use these curves to find the optimal point of production (minimising cost), and profit maximizing firms can use them to decide output quantities to achieve those aims. There are various types of cost curves, all related to each other, including total and average cost curves, and marginal ("for each additional unit") cost curves, which are the equal to the differential of the total cost curves. Some are applicable to the short run, others to the long run.
Read more about Cost Curve: Short-run Average Variable Cost Curve (SRAVC), Short-run Average Total Cost Curve (SRATC or SRAC), Long-run Average Cost Curve (LRAC), Short-run Marginal Cost Curve (SRMC), Long-run Marginal Cost Curve (LRMC), Graphing Cost Curves Together, Cost Curves and Production Functions, Relationship Between Different Curves, Relationship Between Short Run and Long Run Cost Curves, U-shaped Curves
Famous quotes containing the words cost and/or curve:
“It breedeth no small offence and scandal to see and consider upon the one part the curiosity and cost bestowed by all sorts of men upon their private houses; and on the other part the unclean and negligent order and spare keeping of the houses of prayer by permitting open decays and ruins of coverings of walls and windows, and by appointing unmeet and unseemly tables with foul cloths for the communion of the sacrament.”
—Elizabeth I (1533–1603)
“And out again I curve and flow
To join the brimming river,
For men may come and men may go,
But I go on forever.”
—Alfred Tennyson (1809–1892)