hnd微观经济学报告1.docxVIP

a) Total cost is the sum of Fixed cost and Variable cost. In the short run period, outputs will increase due to the increase of production. Fixed Cost does not vary with outputs, it is always a constant quantity.Variable Cost rises as outputs increase.Therefore, Total Cost curve is an upward sloping curve. b) Average cost is obtained by dividing Total cost by the number of units produced, i.e. Average Cost=Total Cost/Number of Unit. Average cost will vary with output because as production increases fixed cost will assume a smaller proportion of the cost of producing each unit. When output is