Important Formulas for Supply

• Fixed Cost: Cost that does not change no matter how much of a good is produced
• Variable cost: Cost that rises or falls depending upon how much is produced. ex: electricity bill.

• TFC + TVC = TC

• AFC + AVC = ATC

• TFC/ Q = AFC

• TVC/ Q = AVC

• TC/ Q = ATC

• AFC x Q = TFC

• AVC x Q = TVC
• marginal cost = new TC - old TC

Q = quantity

TFC = total fixed cost

TVC= total variable cost

TC = total cost

MC = marginal cost

AFC = average fixed cost

AVC = average variable cost

ATC = average total cost