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All these cost curves follow the same characteristics as the curves that we covered in the Production, Costs and Industry Structure chapter.īased on its total revenue and total cost curves, a perfectly competitive firm like the raspberry farm can calculate the quantity of output that will provide the highest level of profit. The total cost curve intersects with the vertical axis at a value that shows the level of fixed costs, and then slopes upward. The vertical axis shows both total revenue and total costs, measured in dollars. The horizontal axis shows the quantity of frozen raspberries produced in packs. (Figure) graphically shows total revenue and total costs for the raspberry farm, also appear in (Figure). 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