the variable costs in the fourth column produces the total costs in the fifth column. For example, with two

barbers the total cost is: $160 + $160 = $320.

Labor Quantity Fixed Cost Variable Cost Total Cost

1

2

3

4

5

6

7

16

40

60

72

80

84

82

$160

$80

$160

$160

$160

$240

$160

$320

$160

$400

$160

$480

$160

$560

TABLE 7.9 Output and Total Costs

$240

$320

$400

$480

$560

$640

$720

FIGURE 7.7 How Output Affects Total Costs At zero production, the fixed costs of $160 are still present. As

production increases, variable costs are added to fixed costs, and the total cost is the sum of the two.

At zero production, the fixed costs of $160 are still present. As production increases, we add variable costs to
fixed costs, and the total cost is the sum of the two. Figure 7.7 graphically shows the relationship between the

quantity of output produced and the cost of producing that output. We always show the fixed costs as the
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