The total cost curve

Question

Quizplus · Accepted Answer

The total cost curve is the sum of total fixed cost and total variable cost. Total fixed cost remains constant at all levels of output, so its curve is a horizontal line. On the other hand, total variable cost increases with the level of output, so its curve increases at an increasing rate due to diminishing returns. The total cost curve is the sum of these two curves and is parallel to and above the total variable cost curve because it includes the constant amount of total fixed cost.

The Total Cost Curve