1.Total cost- it is the combined market price of all the inputs a company buys or uses for the production. Let say for a manufacturing unit, this cost per month is rs. 5 lakhs.
2. Average cost- it is measured by the total cost defined above divided by number of output units produced from the input. So, if 50,000 units are produced the average cost is rs. 10
a. Average fixed cost- it is the fixed cost of the company divided by the number of output units.
b. Average variable cost- it is the total variable cost of a company divided by number of units.
Fixed costs are the ones that remain constant for a company over an entire period of time. Like rent paid for a shop.
Variable costs are the ones that changes or varies from time to time over a period. Like transportation costs.
3. Opportunity cost-it is the things which you give up to get the item.
a. Explicit costs- costs that require an outlay of money.
b. Implicit costs- costs that do not require an outlay of money.
4. Marginal cost- it is the increase in total cost as a result of a one unit increase in production.
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