per day no matter what it does Even if the firm cuts production to zero, it must still pay $200 per day in the short run Acme’s total cost is its total fixed cost of $200 plus its total variable cost We add $200 to the total variable cost curve in Figure 8.5 "The Total Variable Cost Curve" to get the total cost curve shown in Figure 8.6 "From Variable Cost to Total Cost" Figure 8.6 From Variable Cost to Total Cost We add total fixed cost to the total variable cost to obtain total cost In this case, Acme’s total fixed cost equals $200 per day Notice something important about the shapes of the total cost and total variable cost curves inFigure 8.6 "From Variable Cost to Total Cost" The total cost curve, for example, starts at $200 when Acme produces jackets—that is its total fixed cost The curve rises, but at a decreasing rate, up to the seventh jacket Beyond the seventh jacket, the curve becomes steeper and steeper The slope of the total variable cost curve behaves in precisely the same way Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 428