Fixed vs. Variable Costs
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Building the Cost Schedule
The Cost Formulas
Marginal Cost (MC)
Average Total Cost (ATC)
The Critical MC-ATC-AVC Relationship
MC crosses AVC at AVC min, then crosses ATC at ATC min — always from below
The Pull-Up / Pull-Down Rule
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Total Cost Curves
TC = TFC + TVC. The vertical gap between TC and TVC is always TFC ($60)
The Gap Between ATC and AVC
AP Exam Tips
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Common Mistakes
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Unit 3 topics
Unit 3 overview3.1The Production Function3.2Short-Run Production Costs3.3Long-Run Production Costs3.4Types of Profit3.5Profit Maximization3.6Firms' Short-Run Decisions to Produce and Long-Run Decisions to Enter or Exit3.7Perfect Competition3.8Long-Run Equilibrium and Efficiency in Perfect Competition