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Differentiating between Types of Cost Curves

What is a strategy for differentiating between all the different cost curves? Each one is shaped a certain way, and there is a definite relationship between all the different cost curves.

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Solution Preview

Marginal Cost Curve: Its J shaped, or shaped like a hockey stick

Average Fixed Cost Curve: Shaped like an L. Starts high, steep drop and then almost horizontal to the X axis.

Average Variable Cost: Looks like a smiley face.

Average Total Cost: Looks like a smiley face, but ...

Solution Summary

This solution of 213 words explains the shapes of four different cost curves and explains the relationship between the cost curves.

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