Lesson Plan

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Lesson Plan
Grade: Date: 25/02/2026
Subject: Economics
Lesson Topic: Definitions of costs of production: total cost (TC), average total cost (ATC), fixed cost (FC), average fixed cost (AFC), variable cost (VC), average variable cost (AVC)
Learning Objective/s:
  • Define total, fixed, variable, average total, average fixed and average variable costs.
  • Explain the mathematical relationships among cost concepts, including ATC = AFC + AVC.
  • Analyse how cost curves change with output and interpret the U‑shaped ATC curve.
  • Apply cost concepts to decide a firm’s short‑run production choice (TR ≥ VC) and assess profitability.
Materials Needed:
  • Projector or interactive whiteboard
  • Slide deck with cost formulas and diagrams
  • Handout worksheet for cost calculations
  • Graph paper or digital graphing tool
  • Calculators
  • Whiteboard markers
 Introduction:
Begin with a quick poll: “What expenses do you think a business incurs when it starts producing?” Connect responses to prior knowledge of fixed versus variable expenses, then state that today’s success criteria are to correctly define key cost terms, illustrate their formulas, and interpret cost curves.
Lesson Structure:
  1. Do‑now (5’) – Students list examples of fixed and variable costs on sticky notes.
  2. Mini‑lecture (10’) – Present definitions and formulas using slides; highlight ATC = AFC + AVC.
  3. Guided practice (10’) – Work through a sample calculation of TC, AFC, AVC and ATC for a given output level.
  4. Graphing activity (12’) – In pairs, plot AFC, AVC and ATC curves on graph paper and identify the U‑shape.
  5. Concept check (8’) – Quick quiz (Kahoot or handout) with MCQs on cost behaviour and the short‑run production rule.
  6. Reflection (5’) – Students write one sentence summarising when a firm should continue producing in the short run.
Conclusion:
Recap that precise cost definitions and their curves guide firms’ output decisions. For the exit ticket, students state the profit condition (TR > TC) and one action they would take. Homework: complete a worksheet calculating costs for various output levels and sketch the resulting cost curves.