Much like the consumer from Chapter 4 minimizes her expenditures of achieving a given utility level, a firm minimizes its costs of producing a given quantity of a good. These optimal production decisions that a firm makes trace out its total cost curve, which shows the costs of producing a given quantity. In Chapter 7, we deepen our understanding of a firm’s cost structure and delve into a discussion of the specific costs a firm faces. We’ll see that a firm uses its knowledge of its cost structure to inform its cost-