Total Cost
Total cost in economics is the sum total of
all the cost incurred while making a commodity.
It is the total of fixed cost plus variable
cost. let us take an example of a bottle manufacturing company. Here the
company uses plastic as raw materials to produce the finish commodity that is bottle. So the plastic that is used is the variable cost as it changes according to the
suppliers and the manufacturing units like building,plant & machinery is the fixed cost
of the company.
Total cost (TC) = TFC (total fixed cost) + TVC (total variable cost)
Average cost AC= TC/Q
where Q is the quantity.
Types of cost are:
1.
Average cost.
2.
Opportunity cost.
3.
Fixed cost.
4.
Quasi-fixed cost.
5.
Variable cost.
6.
Implicit cost.
7.
Explicit cost.
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