Figure 8.7 Total Cost and Marginal Cost Marginal cost in Panel (b) is the slope of the total cost curve in Panel (a) Figure 8.8 "Marginal Cost, Average Fixed Cost, Average Variable Cost, and Average Total Cost in the Short Run" shows the computation of Acme’s short-run average total cost, average variable cost, and average fixed cost and graphs of these values Notice that the curves for short-run average total cost and average variable cost fall, then rise We say that these cost curves are U-shaped Average fixed cost keeps falling as output increases This is because the fixed costs are spread out more and more as output expands; by definition, they not vary as labor is added Since average total cost (ATC) is the sum of average variable cost (AVC) and average fixed cost (AFC), i.e., Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 432