TOTAL COST CURVE: A curve that graphically represents the relation between the total cost incurred by a firm in the short-run production of a good or service and the quantity produced. The total cost curve graphically represents the relation between total cost and the quantity of production.

## What is the relationship between the marginal cost curve and the average total cost curve?

The marginal cost curve intersects both the average variable cost curve and (short-run) average total cost curve at their minimum points. When the marginal cost curve is above an average cost curve the average curve is rising. When the marginal costs curve is below an average curve the average curve is falling.

## What is the relationship between the marginal cost curve and marginal product?

MARGINAL COST AND MARGINAL PRODUCT: The U-shape of the marginal cost curve is closely related to the hump-shape of the marginal product curve. The increasing portion of the marginal product curve corresponds with the decreasing portion of the marginal cost curve.

## Where does the marginal cost curve intersect the average total cost curve?

The marginal cost curve always intersects the average total cost curve at its lowest point because the marginal cost of making the next unit of output will always affect the average total cost. As a result, so long as marginal cost is less than average total cost, average total cost will fall.

## What is Lrac curve?

The long-run average cost (LRAC) curve shows the firm’s lowest cost per unit at each level of output, assuming that all factors of production are variable. The costs it shows are therefore the lowest costs possible for each level of output.

## What is the shape of fixed cost curve?

Answer: Average Fixed Cost Curve is a rectangular hyperbola. This is because of the reason it is negatively sloped for relatively small quanitites.

## What is the shape of TVC curve?

The TFC curve is parallel to the horizontal axis while the TVC curve is inverted-S shaped. Thus, the TC curve is the same shape as TVC but begins from the point of TFC rather than the origin. The law that explains the shape of TVC and subsequently TC is called the law of variable proportions.

## Which is known as envelope curve?

The curve long run average cost curve (LRAC) takes the scallop shape, which is why it is called an envelope curve.

## Which of the following cost curve is never U shaped?

Average fixed cost curve is never U-shaped. The average fixed costs AFC curve is downward sloping because fixed costs are distributed over a larger volume when the quantity produced increases.