Question:

Cost Curve question- URGENT

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Could someone describe what the cost curves would look like on this. - fixed costs 10$ per day, variable costs 1$ per unit. It can handle 50 units, and impossible to get more capacity. What does the Average cost curve, average fixed cost curve, and marginal cost curve look like. I know how to draw these usually, but im getting a bit messed up with the figures, and does the constant variable cost mean constant MC?

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  1. ok...here it is.  The ATC curve is U shaped.  The AFC is always downward slopping.  The marginal cost curve crosses the ATC at the min of ATC.  

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