ECONOMICS

Detailed explanation-1: -Total fixed cost (TFC) is that cost which does not change with a change in the level of output. Total variable cost (TVC) is that cost which changes as the level of output changes. Total cost (TC) is the sum of total fixed cost and total variable fixed cost.

Detailed explanation-2: -The total cost is the sum of fixed costs and variable costs. For example, if a firm has a fixed cost of $30 per unit and a variable cost of $5 per unit as they increase their output, the total cost will be $35.

Detailed explanation-3: -Total Cost = Total Fixed Cost + Total Variable Cost. It can also be represented in a more advanced way as, Total Cost = (Average fixed cost + Average variable cost) x Number of units. This was all about the total cost formula, which is a very important concept for determining the total cost of production.

Detailed explanation-4: -Consequently, total cost is fixed cost (FC) plus variable cost (VC), or TC = FC + VC = Kr+Lw. In the long run, however, both capital usage and labor usage are variable.