Draw a picture showing both the marginal cost curve

Reference no: EM13689540

Fangorn Inc., a forestry firm, faces a constant marginal cost for producing firewood of 2 gold coins per cord. As the firm’s uses very rudimentary equipment, its fixed costs are only 10 gold coins.

a) Draw a picture showing both the marginal cost curve and the total cost curve for Fangorn Inc.

b) What is the shape of the cost curve in this case? Can you conclude something more general about cost curves when marginal costs are constant?

Reference no: EM13689540

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