Constant Variable Costs

Overview


Constant variable costs are variable costs that are independent of the amount of product being produced. This leads to a cost curve which is a straight line.

Total Costs


A basic breakdown of total costs using the fixed/variable framework would be
{% TC = F + V \times q %}
  • F = fixed costs
  • V = Variable costs


In this case, the variable costs are constant, that is, this is a linear equation of fixed and variable costs.
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In the charted example, fixed costs equal 1000, and the variable cost is 2.
{% TC = 1000 + 2 \times q %}

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