Ignite Your Bliss: A Case Study on Cost Curves Analysis

Abstract

Cost curves analysis is a challenging economics subject to teach. It requires the presentation of extensive cost tables, cost equations, and a set of cost curves, which students tend to find highly theoretical. In addition, the literature on real-world applications of cost curves analyses is limited, mainly because firms release their cost structures at current output levels rather than at potential output levels. Thus, there are few available pedagogical tools for economics instructors to use when facing the difficult task of linking the theory to the firm’s real-world cost analyses. This paper contributes to economics pedagogy by briefly proposing a case study on a yoga retreat business that serves as a valuable example of a cost curves analysis.