1. How Do Cost Curves Shift?
DO NOW: What can cause
A firm’s costs to change?

2. What if Fixed Costs increase to $200
Shifting Costs Curves TP VC FC TC MC
AVC
AFC
ATC
100 - 1 10
110 2 16
116 6 8 50 58 3 21
121 5 7
33.3
30.3 4 26
126
6.5 25
31.5 30
130 20 36
136
16.67
22.67 46
146
6.6
14.3
20.9
What if Fixed Costs increase to $200

3. Shifting Costs Curves TP VC FC TC MC AVC AFC ATC 100 - 1 10 110 2 16
100 - 1 10
110 2 16
116 6 8 50 58 3 21
121 5 7
33.3
30.3 4 26
126
6.5 25
31.5 30
130 20 36
136
16.67
22.67 46
146
6.6
14.3
20.9

4. Shifting Costs Curves TP VC FC TC MC AVC AFC ATC 200 100 - 1 10 110 2
200
100 - 1 10
110 2 16
116 6 8 50 58 3 21
121 5 7
33.3
30.3 4 26
126
6.5 25
31.5 30
130 20 36
136
16.67
22.67 46
146
6.6
14.3
20.9

5. Which Per Unit Cost Curves Change?
Shifting Costs Curves TP VC FC TC MC
AVC
AFC
ATC
200 - 1 10
210
100
110 2 16
216 6 8 50 58 3 21
221 5 7
33.3
30.3 4 26
226
6.5 25
31.5 30
230 20 36
236
16.67
22.67 46
246
6.6
14.3
20.9
Which Per Unit Cost Curves Change?

6. ONLY AFC and ATC Increase!
Shifting Costs Curves TP VC FC TC MC
AVC
AFC
ATC
200 - 1 10
210
100
110 2 16
216 6 8 50 58 3 21
221 5 7
33.3
30.3 4 26
226
6.5 25
31.5 30
230 20 36
236
16.67
22.67 46
246
6.6
14.3
20.9
ONLY AFC and ATC Increase!

7. ONLY AFC and ATC Increase!
Shifting Costs Curves TP VC FC TC MC
AVC
AFC
ATC
200 - 1 10
210
110 2 16
216 6 8
100 58 3 21
221 5 7
66.6
30.3 4 26
226
6.5 50
31.5 30
230 40 36
236
33.3
22.67 46
246
6.6
28.6
20.9
ONLY AFC and ATC Increase!

8. If fixed costs change ONLY AFC and ATC Change!
Shifting Costs Curves
If fixed costs change ONLY AFC and ATC Change! TP VC FC TC MC
AVC
AFC
ATC
200 - 1 10
210 2 16
216 6 8
100
108 3 21
221 5 7
66.6
73.6 4 26
226
6.5 50
56.5 30
230 40 46 36
236
33.3
39.3
246
6.6
28.6
35.2
MC and AVC DON’T change!

9. Shift from an increase in a Fixed CostMC
ATC1
ATC
AVC
Costs (dollars)
AFC1
AFC
Quantity

10. Shift from an increase in a Fixed CostMC
ATC1
AVC
Costs (dollars)
AFC1
Quantity

11. What if the cost for variable resources increase
Shifting Costs Curves TP VC FC TC MC
AVC
AFC
ATC
100 - 1 10
110 2 16
116 6 8 50 58 3 21
121 5 7
33.3
30.3 4 26
126
6.5 25
31.5 30
130 20 36
136
16.67
22.67 46
146
6.6
14.3
20.9
What if the cost for variable resources increase

12. Shifting Costs Curves TP VC FC TC MC AVC AFC ATC 100 - 1 10 110 2 16
100 - 1 10
110 2 16
116 6 8 50 58 3 21
121 5 7
33.3
30.3 4 26
126
6.5 25
31.5 30
130 20 36
136
16.67
22.67 46
146
6.6
14.3
20.9

13. Shifting Costs Curves TP VC FC TC MC AVC AFC ATC 100 - 1 11 110 10 2
100 - 1 11
110 10 2 18
116 6 8 50 58 3 24
121 5 7
33.3
30.3 4 30
126
6.5 25
31.5 35
130 20 26 43
136
16.67
22.67 55
146
6.6
14.3
20.9

14. Which Per Unit Cost Curves Change?
Shifting Costs Curves TP VC FC TC MC
AVC
AFC
ATC
100 - 1 11
111 10
110 2 18
118 6 8 50 58 3 24
124 5 7
33.3
30.3 4 30
130
6.5 25
31.5 35
135 20 26 43
143
16.67
22.67 55
155
6.6
14.3
20.9
Which Per Unit Cost Curves Change?

15. Shifting Costs Curves TP VC FC TC MC AVC AFC ATC 100 - 1 11 111 10 110
100 - 1 11
111 10
110 2 18
118 7 8 50 58 3 24
124 6
33.3
30.3 4 30
130
6.5 25
31.5 5 35
135 20 26 43
143
16.67
22.67 55
155 12
6.6
14.3
20.9
MC, AVC, and ATC Change!

16. Shifting Costs Curves TP VC FC TC MC AVC AFC ATC 100 - 1 11 111 110 2
100 - 1 11
111
110 2 18
118 7 9 50 58 3 24
124 6 8
33.3
30.3 4 30
130
7.5 25
31.5 5 35
135 20 26 43
143
7.16
16.67
22.67 55
155 12
7.8
14.3
20.9
MC, AVC, and ATC Change!

17. If variable costs change MC, AVC, and ATC Change!
Shifting Costs Curves
If variable costs change MC, AVC, and ATC Change! TP VC FC TC MC
AVC
AFC
ATC
100 - 1 11
111 2 18
118 7 9 50 59 3 24
124 6 8
33.3
41.3 4 30
130
7.5 25
32.5 5 35
135 20 27 43
143
7.16
16.67
23.83 55
155 12
7.8
14.3
22.1

18. Shift from an increase in a Variable Costs
MC1 MC
ATC1
AVC1
ATC
AVC
Costs (dollars)
AFC
Quantity

19. Shift from an increase in a Variable Costs
MC1
ATC1
AVC1
Costs (dollars)
AFC
Quantity