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:
“[M]y conception of liberty does not permit an individual citizen or a group of citizens to commit acts of depredation against nature in such a way as to harm their neighbors and especially to harm the future generations of Americans. If many years ago we had had the necessary knowledge, and especially the necessary willingness on the part of the Federal Government, we would have saved a sum, a sum of money which has cost the taxpayers of America two billion dollars.”
—Franklin D. Roosevelt (1882–1945)
“In philosophical inquiry, the human spirit, imitating the movement of the stars, must follow a curve which brings it back to its point of departure. To conclude is to close a circle.”
—Charles Baudelaire (1821–1867)