Cost Curves visualize relationships between output levels and various costs. AFC curve: Continuously declining (approaches zero as output increases). AVC curve: Initially falling, then rising (U-shaped in later stages). ATC curve: U-shaped, declining initially, then rising; at minimum, ATC = MC. MC curve: Often U-shaped; starts low, may initially fall then rises; intersects AVC at AVC minimum and ATC at ATC minimum. Relationships: ATC = AFC + AVC (vertical addition); MC intersects AVC at minimum AVC; MC intersects ATC at minimum ATC; Below AVC, firm minimizes losses by shutting down; Between AVC and ATC, firm covers variable costs but loses fixed costs; Above ATC, firm earns profit. Graphically: All curves commonly on one graph, MC intersecting both averages at their minima. Short-run vs. long-run: Short-run has FC; long-run all costs are variable. Real example: Factory costs—rent is fixed, material is variable, total cost is sum. ICAI focus: Reading curves, understanding intersections, determining profit/loss zones. Exam tip: The intersection points (MC with AVC and ATC) are crucial; they mark minimums of average costs.