The average variable cost curve is typically U-shaped or upward-sloping, as it is below the average total cost curve. The difference in total cost between two levels of output is divided by the ...

then average total cost must be increasing. 5. The short-run is that period of time during which some inputs cannot be varied. 6. The slope of the short-run total cost curve equals the slope of the ...

If a perfectly competitive firm's market price is less than its average variable cost at the profit-maximizing quantity of output, it should immediately cease operations. The shutdown point is defined ...

Variable cost analysis is important for the following reasons: Variable cost and average variable cost may not always be equal due to price increases or discounts. Consider the variable cost of a ...