<p>The U-shaped average cost curve follows from assuming an <a href="https://www.hetwebsite.net/het/essays/product/prodfunc.htm#variable" rel="nofollow noreferrer">S-shaped (short-run) production function</a> (i.e. <span class="math-container">$K$</span> is fixed and <span class="math-container">$L$</span> is variable), which has an initial convex segment representing increasing marginal productivity of labor and then a concave portion capturing diminishing marginal product. This translates into a total cost curve that is initially concave and eventually convex, which in turn gives rise to the U-shaped average cost curves. Fixed cost plays no role here.</p>
<p>Instead, if the production function is globally concave (e.g. the <a href="https://en.wikipedia.org/wiki/Cobb%E2%80%93Douglas_production_function" rel="nofollow noreferrer">Cobb-Douglas production function</a> where <span class="math-container">$K$</span> is fixed), then average cost would be increasing everywhere.</p>

CC BY-SA 4.0
2024-09-17T16:00:58.497Z
2024-09-17T16:00:58.497Z
Herr K.
<p>I'm a Computer Science undergraduate taking Microeconomics for my final exam. I've been studying the concept of average cost. I've always understood that the average cost curve is typically U-shaped due to fixed costs being present and an upwards sloping average variable cost curve.</p>
<p>However, I'm wondering if there are any situations where the average cost curve might not be U-shaped. Could this be when then fixed costs are equal to 0?</p>

<microeconomics><cost-functions>
Can the Average Cost Curve have a different shape other than U?
PatelisGM
# Can the Average Cost Curve have a different shape other than U?

(Asked by: username_0 on 2024-09-17)

I'm a Computer Science undergraduate taking Microeconomics for my final exam. I've been studying the concept of average cost. I've always understood that the average cost curve is typically U-shaped due to fixed costs being present and an upwards sloping average variable cost curve.

However, I'm wondering if there are any situations where the average cost curve might not be U-shaped. Could this be when then fixed costs are equal to 0?

**Tags:** microeconomics, cost-functions

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## 1 answers

### Answer by username_1 on 2024-09-17. Score: 1 | Accepted answer

The U-shaped average cost curve follows from assuming an [S-shaped (short-run) production function](https://www.hetwebsite.net/het/essays/product/prodfunc.htm#variable) (i.e. $K$ is fixed and $L$ is variable), which has an initial convex segment representing increasing marginal productivity of labor and then a concave portion capturing diminishing marginal product. This translates into a total cost curve that is initially concave and eventually convex, which in turn gives rise to the U-shaped average cost curves. Fixed cost plays no role here.

Instead, if the production function is globally concave (e.g. the [Cobb-Douglas production function](https://en.wikipedia.org/wiki/Cobb%E2%80%93Douglas_production_function) where $K$ is fixed), then average cost would be increasing everywhere.


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