In economics

Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, a cost curve is a graph of the costs of production as a function of total quantity produced. In a free market

Free market

A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...

 economy, productively efficient

Productive efficiency

Productive efficiency occurs when the economy is utilizing all of its resources efficiently, producing most output from least input. The concept is illustrated on a production possibility frontier where all points on the curve are points of maximum productive efficiency...

 firms use these curves to find the optimal point of production (minimising cost), and profit maximizing

Profit maximization

In economics, profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. There are several approaches to this problem...

 firms can use them to decide output quantities to achieve those aims. There are various types of cost curves, all related to each other, including total and average cost curves, and marginal ("for each additional unit") cost curves, which are the equal to the differential

Differentiation

Differentiation may refer to:* Differentiation , the process of finding a derivative* Differentiated instruction in education* Cellular differentiation in biology* Planetary differentiation in planetary science...

 of the total cost curves.