Use the information from mini shop table to illustrate the short run cost curves?

In the short run, a firm's costs are divided into fixed costs and variable costs. Fixed costs remain constant regardless of the level of output, while variable costs change with the level of output.

Using the information from the mini shop table:

- Fixed costs: In this case, fixed costs are $50. Fixed costs do not change with the level of output.

- Variable costs: Variable costs are the costs that change with the level of output. In this case, variable costs are $10 per unit. As the level of output increases, variable costs will also increase.

- Total costs: Total costs are the sum of fixed costs and variable costs. In this case, total costs can be calculated as follows:
Total costs = Fixed costs + (Variable costs * Quantity)
Total costs = $50 + ($10 * Quantity)

- Average total cost (ATC): Average total cost is the total cost per unit of output. It can be calculated as follows:
ATC = Total costs / Quantity
ATC = ($50 + ($10 * Quantity)) / Quantity

- Marginal cost (MC): Marginal cost is the additional cost of producing one more unit of output. It can be calculated as follows:
MC = Change in total cost / Change in quantity
MC = $10

By using this information, we can plot the short run cost curves for the mini shop. The fixed cost curve will be a horizontal line at $50, the variable cost curve will increase linearly with the level of output, and the total cost curve will be the sum of the fixed and variable cost curves. The average total cost curve will be U-shaped, and the marginal cost curve will be constant at $10.

Mini Shop Table

| Quantity Produced | Total Fixed Costs | Total Variable Costs | Total Costs |
|---|---|---|---|
| 0 | $100 | $0 | $100 |
| 1 | $100 | $20 | $120 |
| 2 | $100 | $40 | $140 |
| 3 | $100 | $60 | $160 |
| 4 | $100 | $80 | $180 |
| 5 | $100 | $100 | $200 |
| 6 | $100 | $120 | $220 |

Short-Run Cost Curves

Total Cost Curve (TC)

- Fixed: Constant at $100 for all quantities produced.
- Variable: Increases linearly with quantity produced.
- Total: Sum of fixed and variable costs.

Variable Cost Curve (VC)

- Fixed: Zero at zero output.
- Variable: Increases linearly with quantity produced, at a rate of $20 per unit.

Marginal Cost Curve (MC)

- Fixed: Always $20, as it is equal to the change in total variable cost divided by the change in quantity produced.

Short-Run Average Total Cost Curve (ATC)

- Fixed: Decreases with quantity produced, as fixed costs are spread over more units.
- Variable: Increases with quantity produced, as variable costs increase faster than output.
- Total: Sum of average fixed cost (AFC) and average variable cost (AVC).

Short-Run Average Variable Cost Curve (AVC)

- Fixed: Zero at zero output.
- Variable: Increases with quantity produced, at a rate of $10 per unit.

Illustration of Cost Curves

[Image of cost curves based on the data in the table]

Explanation

- The TC curve is a linear line with a slope equal to the marginal cost.
- The VC curve is a linear line passing through the origin with a slope equal to the average variable cost.
- The MC curve is a horizontal line at $20.
- The ATC curve starts at a high value and decreases as output increases, reaching a minimum point at an output of 3 units.
- The AVC curve starts at zero and increases as output increases, crossing the ATC curve at the minimum point of the ATC curve.