Cost curves

Learning Objectives: Sunk cost fallacy, short term shut down condition, profit maximisation, deriving a supply curve.
Lecture handout: Cost curves*

  • La Marmotte, January 2012
    Instructions: Complete Exhibit 1 and provide suggestions for the two key decisions

My favourite example of the importance of having an intuitive understanding of the shape of average costs curves is this one:

Here’s my video on the difference between short run and long run costs:


Here’s a video with a more traditional, textbook treatment of supply curves:

Finally, in this video on the UK probation service I look at different ways of measuring cost:

These resources form part of my Managerial Economics course map. You can watch the full YouTube playlist here. This page ties into Chapter 2 of ‘Markets for Managers’.


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