Short-Run Costs: Before jumping in to a discussion of various measures and subcategories of costs, it is worthwhile taking one more opportunity to remind students how the twin concepts of production and cost are related.  This could include jumping partway through this section to the material on how production functions and cost functions are related.  A series of diagrams can be used to show that the cost function and the production function, while not mirror images of one another share many properties.  This is true of averages and marginals as well.

 

The bulk of this section presents definitions and examples of various measures and subcategories of costs.  Much of the terminology will likely be review for most students, but for most of them the calculus-based portions of the discussion will be new.  It is very important to remind students about averages and marginals again and to make the point, as suggested in the previous chapter, that they focus their attention on what it means to be an average or a marginal, not the specific formulae.