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)
Interactive feature not available in single page view (see it in standard view).
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).
