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Economics and the 2008 crisis: a Keynesian view
Economics and the 2008 crisis: a Keynesian view

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Short run cost curves (2)

The next activity will check that you can interpret the shape of the average cost, average variable and average fixed cost curves described in the video, Fixed and variable cost.

Activity 23a

Click on the short run cost curve figure below to identify the approximate point where average costs are at a minimum.

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Figure 37 Average cost curves (2)
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Discussion

Look at the figure below. The red arrow shows the correct answer for the point of minimum average cost.

The brown arrow shows the point of minimum average variable cost. The average fixed cost curve has no minimum as it decreases with every unit of output (it is not u-shaped).