21.The cost curves for an individual firm are given in the figure.In Figure (A), highlight the firm’s short-run supply curve.In Figure (B), highlight the firm’s long-run supply curve. The image comprises two graphs labeled (A) and (B) depicting cost curves in microeconomics, specifically focusing on Marginal Cost (MC), Average Total Cost (ATC), and Average Variable Cost (AVC) in relation to Quantity.### Graph (A)- **MC Curve**: This cyan upward-sloping curve represents the Marginal Cost. It indicates how the cost of producing one additional unit changes with quantity.- **ATC Curve**: The maroon curve, generally U-shaped, represents the Average Total Cost. It shows the per-unit cost, inclusive of fixed and variable costs, averaged over all units produced.- **AVC Curve**: The peach-colored curve, also U-shaped but positioned below the ATC, represents the Average Variable Cost, reflecting per-unit variable costs over quantities produced.### Graph (B)This graph mirrors Graph (A) with identical relationships:- **MC Curve**: Upward-sloping and intersects the ATC and AVC at their minimum points.- **ATC and AVC Curves**: Display similar U-shaped characteristics as in Graph (A), with the ATC positioned above the AVC.Both graphs emphasize key economic concepts: the MC curve intersects both the ATC and AVC curves at their minimum points, illustrating optimal production levels where economies of scale shift to diseconomies.

Here, given two graphs shows the marginal cost, average total cost and average variable cost curves.

Answered: 21.The cost curves for an individual…

21.The cost curves for an individual firm are given in the figure. In Figure (A), highlight the firm’s short-run supply curve. In Figure (B), highlight the firm’s long-run supply curve.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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