A Derivation of Average Cost Curves by Linear Programming

This paper presents a further modification of linear programming technique which, provides the basis for the calculation of average cost curves. The procedure followed is similar to variable resource programming. Returns are maximized with respect to the output of a particular product as output is varied over the desired range. This provides information on variable costs which when combined with fixed-cost data permits the plotting of average cost curves. The author is indebted to Walter R. Butcher and Earl 0. Heady for their constructive criticism.