Homework answers / question archive / Short Run Cost Graphs a

Short Run Cost Graphs a

Economics

Share With

Short Run Cost Graphs
a. Draw a fully labeled graph of the typical SR cost curves (ATC, AVC, MC). 
b. In your graph from part (a), what is the relationship between MC and ATC?
c. Draw a 2nd graph showing ATC, AVC, and MC for a firm with high fixed costs and low variable 
costs. Make sure that your answer clearly shows any differences between this graph and the 
one from part (a).
d. What is a real business that would have relatively high fixed costs and low variable costs like the 
ones in part b? Explain briefly what costs the business faces and why they would mostly be 
fixed costs.