How to Calculate the Increase of a Cost Curve

In the study of economics, cost curves are graphical representations of how the cost and quantity of goods or services relate to one another. In other words, a cost graph shows production costs as a function of the number of products produced. Cost graphs are parabolas, in the shape of an upturned umbrella. Determining how much a cost curve has increased tells you the increase in cost for a certain number of manufactured items. For example, you may want to find out the increase in cost for increasing production from 100 units to 150 units.

Instructions

    • 1

      Read the graph to determine the initial values. For example, if you are determining how much it costs to produce 100 products, look up 100 on the X-axis (the horizontal axis of the graph, usually labeled quantity). Trace a vertical line up to the graph, and read the value on the Y-axis (the vertical line, usually labeled cost per unit).

    • 2

      Find the second point on the graph. For example, look up 150 on the X-axis. Trace a line up to the graph, and read the value on the Y-axis.

    • 3

      Subtract the two Y-values you found in Steps 1 and 2 to find the change in cost per unit. For example, if you found Y-values of 50 for the initial value and 75 for the second value, then:
      75 -- 50 = 25.
      25 is the increase in cost per unit for your cost curve.

    • 4

      Subtract the two X-values you used in Step 1 and 2 to find the difference in quantity. For example, if you used 150 and 100, then:
      150 -- 100 = 50.
      So 50 is the increase in quantity for your cost curve.

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