overwhelm the website, and increasing output further could require a purchase of additional computer space.

For other firms, fixed costs may be relatively low. For example, consider firms that rake leaves in the fall or

shovel snow off sidewalks and driveways in the winter. For fixed costs, such firms may need little more than a

car to transport workers to homes of customers and some rakes and shovels. Still other firms may find that

diminishing marginal returns set in quite sharply. If a manufacturing plant tried to run 24 hours a day, seven

days a week, little time remains for routine equipment maintenance, and marginal costs can increase

dramatically as the firm struggles to repair and replace overworked equipment.

Every firm can gain insight into its task of earning profits by dividing its total costs into fixed and variable

costs, and then using these calculations as a basis for average total cost, average variable cost, and marginal
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