Suppose you have the following values for a short-run production process: Q = 20, VC = 100, FC = 600 and MC = 40.Given this, we know that the:

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The average cost (AC) is calculated as total cost (TC) divided by quantity (Q). TC is the sum of variable cost (VC) and fixed cost (FC), so AC = (VC + FC) / Q = (100 + 600) / 20 = 35. Since the marginal cost (MC) of 40 is greater than the average cost of 35, the average cost curve must be increasing.

Suppose You Have the Following Values for a Short-Run Production