Cost Curves Calculator
Paste a table of output and total cost and the calculator builds the full cost schedule: fixed and variable cost, average fixed, average variable and average total cost, and marginal cost. It draws the curves, finds the lowest points of ATC and AVC, and, if you enter a market price, shows how much a competitive firm should produce and whether it should shut down.
Separate the two numbers with a comma, tab, semicolon or space (use semicolons if your numbers have decimal commas). A first line without numbers is read as a header. Output can be listed in any order and in steps of any size.
Needed when the cost column is variable cost, or when there is no Q = 0 row. With total cost data, a Q = 0 row sets the fixed cost.
The price a competitive firm takes as given. Fill it in for the profit-maximising output and the shut-down decision.
Results
100
Fixed cost (FC)
45
Break-even price: minimum ATC, at Q = 5
21
Shutdown price: minimum AVC, at Q = 3
In the short run a competitive firm earns zero economic profit when price equals the lowest ATC, and stops producing when price falls below the lowest AVC. Both are read from the outputs you listed.
Cost table
| Q | TC | FC | VC | AFC | AVC | ATC | MC | Profit |
|---|---|---|---|---|---|---|---|---|
| 0 | 100 | 100 | 0 | — | — | — | — | −100 |
| 1 | 125 | 100 | 25 | 100 | 25 | 125 | 25 | −85 |
| 2 | 144 | 100 | 44 | 50 | 22 | 72 | 19 | −64 |
| 3 | 163 | 100 | 63 | 33.33 | 21 | 54.33 | 19 | −43 |
| 4 | 188 | 100 | 88 | 25 | 22 | 47 | 25 | −28 |
| 5 | 225 | 100 | 125 | 20 | 25 | 45 | 37 | −25 |
| 6 | 280 | 100 | 180 | 16.67 | 30 | 46.67 | 55 | −40 |
| 7 | 359 | 100 | 259 | 14.29 | 37 | 51.29 | 79 | −79 |
| 8 | 468 | 100 | 368 | 12.5 | 46 | 58.5 | 109 | −148 |
| 9 | 613 | 100 | 513 | 11.11 | 57 | 68.11 | 145 | −253 |
| 10 | 800 | 100 | 700 | 10 | 70 | 80 | 187 | −400 |
VC = TC − FC. AFC, AVC and ATC divide by Q. MC = ΔTC ÷ ΔQ, measured from the row above. Profit = P × Q − TC at the market price.
At a market price of 40
5
Profit-maximising output
200
Total revenue
−25
Profit (loss if negative)
Produce at a loss: price is above the minimum AVC but below the minimum ATC, so revenue covers variable cost and part of the fixed cost. The loss is smaller than the fixed cost the firm owes anyway.
The output is the listed quantity with the highest profit, P × Q − TC. With rising marginal cost that is the last unit whose MC is no higher than the price.
Show the graph data as a table
| Q | MC | ATC | AVC | AFC |
|---|---|---|---|---|
| 1 | 25 | 125 | 25 | 100 |
| 2 | 19 | 72 | 22 | 50 |
| 3 | 19 | 54.33 | 21 | 33.33 |
| 4 | 25 | 47 | 22 | 25 |
| 5 | 37 | 45 | 25 | 20 |
| 6 | 55 | 46.67 | 30 | 16.67 |
| 7 | 79 | 51.29 | 37 | 14.29 |
| 8 | 109 | 58.5 | 46 | 12.5 |
| 9 | 145 | 68.11 | 57 | 11.11 |
| 10 | 187 | 80 | 70 | 10 |
MC is plotted halfway between the two outputs it is measured over. Curves are straight lines between the listed outputs, and a steep start or tail is cut off so the minimum stays readable.
How to Use the Cost Curves Calculator
- 1. Enter output and cost. One pair per line, such as 5, 225. The example has a header line and a row for zero output, which is where the calculator reads the fixed cost.
- 2. Say what the cost column is. Choose total cost (TC) or variable cost (VC). With variable cost, or with no Q = 0 row, enter the fixed cost yourself.
- 3. Add a market price if the question has one. A competitive firm takes the price as given. The calculator finds the output with the highest profit and says whether to produce at a profit, produce at a loss, or shut down.
- 4. Read the table and the graph. The break-even price is the lowest point of ATC and the shutdown price is the lowest point of AVC. Marginal cost cuts through both curves at those points.
The Cost Definitions
Variable cost
VC = TC − FC
Average fixed cost
AFC = FC ÷ Q
Average variable cost
AVC = VC ÷ Q
Average total cost
ATC = TC ÷ Q = AFC + AVC
Marginal cost
MC = ΔTC ÷ ΔQ
Fixed cost is what the firm pays whatever it produces: rent, a lease, a licence. Variable cost grows with output. Marginal cost is the extra cost of the extra output. When the table steps one unit at a time, it is the change in total cost from one row to the next; with bigger steps, the calculator divides by the size of the step, so it is the average marginal cost over that stretch. MC is plotted halfway between the two outputs it spans, which is how most textbooks draw it.
Worked Example: A Firm With $100 of Fixed Cost
The default data are TC = 100 + 30Q − 6Q² + Q³ for outputs from 0 to 10. Four of the rows:
| Q | TC | AVC | ATC | MC |
|---|---|---|---|---|
| 3 | 163 | 21 | 54.33 | 19 |
| 4 | 188 | 22 | 47 | 25 |
| 5 | 225 | 25 | 45 | 37 |
| 6 | 280 | 30 | 46.67 | 55 |
ATC is lowest at Q = 5, where it equals 45, so the break-even price is 45. AVC is lowest at Q = 3, where it equals 21, so the shutdown price is 21. At a price of 40, which sits between them, the calculator reports the best output as 5 units, with revenue of 200 against a total cost of 225: a loss of 25. That is better than shutting down, which would lose the whole fixed cost of 100, because each unit sold brings in more than its variable cost. At a price of 60 the best output is 6 and the profit is 80.
Break-Even and Shutdown Prices
- Price above the minimum ATC: the firm earns an economic profit, and new firms are drawn in over time.
- Price equal to the minimum ATC: economic profit is zero. This is the break-even price, and the long-run equilibrium price in a competitive market.
- Price between the minimum AVC and the minimum ATC: the firm loses money but loses less by producing than by closing, so it keeps producing in the short run.
- Price below the minimum AVC: every unit sold loses money. The firm shuts down and loses only its fixed cost.
The firm's short-run supply curve is the part of its marginal cost curve above the minimum of AVC, because it produces where price equals marginal cost. Both minimums are read from the outputs you list, so they are exact only to the resolution of the table. Use smaller steps near the lowest point to see it more precisely.
Frequently Asked Questions
- How do you calculate marginal cost from total cost?
- Subtract the total cost at the previous output from the total cost at this output, and divide by the change in output. If total cost rises from 188 to 225 when output rises from 4 to 5, the marginal cost of the fifth unit is 37.
- Why does the marginal cost curve cross ATC and AVC at their lowest points?
- An average falls while the marginal figure is below it and rises while the marginal figure is above it, like a cumulative grade point average. So the average is at its minimum exactly where the marginal cost equals it. The same reasoning applies to AVC and ATC separately.
- What is the shutdown price?
- It is the lowest price at which a firm covers its variable costs: the minimum of average variable cost. Below it, producing loses more than the fixed cost, so the firm is better off producing nothing in the short run, even though it still owes its fixed cost.
- What is the difference between the shutdown price and the break-even price?
- The shutdown price is the minimum of AVC and the break-even price is the minimum of ATC, which is higher because ATC also includes average fixed cost. Between the two the firm loses money but should keep producing, since the revenue above variable cost helps pay the fixed cost.
- Why is the average total cost curve U-shaped?
- Average fixed cost is a fixed amount divided by a growing quantity, so it falls continuously and gets arbitrarily small. ATC is AFC plus AVC. At low output the fall in AFC outweighs the rise in AVC and ATC falls, then rising AVC takes over and ATC turns up, which gives ATC its U shape.
- Can I enter variable cost instead of total cost?
- Yes. Choose variable cost as the cost column and enter the fixed cost in its own box. The calculator adds them to get total cost, and the rest of the table follows. The fixed cost is also needed for total cost data that has no row for zero output.