Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.
PART 5 Firm Behavior and the Organization of Industry
Chapter 13 of 36 The Costs of Production 
Section 15 of 22
…
Graphs of average costs and marginal cost are useful when analyzing firm behavior.
Figure 4 is a graph of Conrad's costs from Table 2 data.
· the horizontal axis shows the quantity of output the firm produces
· the vertical axis shows costs
The graph plots four cost curves
· Average Total Cost (ATC)
· Average Fixed Cost (AFC)
· Average Variable Cost (AVC)
· Marginal Cost (MC)
For example, at 5 cups of coffee per hour
ATC = $1.30
AFC = $0.60
AVC = $0.70
MC = $1.20
We will examine three main features
· shape of the MC curve
· shape of the ATC curve
· relationship between MC and ATC
… …
five cups of coffee per hour
ichijikan atari kōhī gopai
一時間あたりコーヒー五杯

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