Question

The graph shows the short-run total cost curves of Poppy Lipstick, a producer of lipsticks. Draw a point on each curve and give it the appropriate label. Total cost (dollars) 18004 1600 1400 1200 1000 800 600- to 30 60 90 120 Quantity (lipsticks per day) 150 180 >>> Draw only the objects specified in the question.

Answer 1

Condition: Total Cost = Total Variable Cost + Total Fixed Cost

Thus the curve of Total Cost will be Total Fixed cost adding the Total variable Cost curve vertically. so the Purple curve has to be the Total variable cost.

the fixed cost is same through out the quantities thus the green curve has to be the fixed cost curve.

The sky blue curve is the sum of both curves. thus it total cost curve.

the picture with correct lables:

Total cost dollars) 1800- 1600- Blue Curve: Total Cost Purple Curve: Total Variable Cost TVC Green line : Fixed Cost Total Cost = Total Variable Cost + total Fixed Cost TEC 0 316 60 90 120 Quantity dipsticks per day 160 180 >>> Draw only the abjects specified in the question.