238 Chapter 6 Cost Analysis
3,000
0 60
Output (Thousands of Units)
Total Cost (Thousands of Dollars)
5 10 15 20 25 30 35 40 45 50 55
2,000
1,000
Cost function
FIGURE 6.1
A Firm’s Total Costs
Total cost is the sum of
fixed cost and variable
cost.
Annual Output Total Cost Fixed Cost Variable Cost
(Repairs Thousands) ($ Thousands) ($ Thousands) ($ Thousands)
0 270.0 270 0.0
5 427.5 270 157.5
10 600.0 270 330.0
15 787.5 270 517.5
20 990.0 270 720.0
25 1,207.5 270 937.5
30 1,440.0 270 1,170.0
35 1,687.5 270 1,417.5
40 1,950.0 270 1,680.0
45 2,227.5 270 1,957.5
50 2,520.0 270 2,250.0
55 2,827.5 270 2,557.5
60 3,150.0 270 2,880.0
c06CostAnalysis.qxd 9/29/11 1:46 PM Page 238