Total Cost

… a core term used in Economic Analysis and Atlas102

Definition

Wikipedia (reference below) defines total cost as the total economic cost of production, made up of variable costs, which vary according to the quantity of a good produced and include inputs such as labor and raw materials, plus fixed costs, which are independent of the quantity of a good produced and include inputs (capital) that cannot be varied in the short term, such as buildings and machinery.

Wikipedia goes on to say:

“Total cost in economics includes the total opportunity cost of each factor of production as part of its fixed or variable costs.

“The rate at which total cost changes as the amount produced changes is called marginal cost. This is also known as the marginal unit variable cost.”

Atlas topic, subject, and course

Producer Theory and Competition (core topic) in Economic Analysis and Atlas102 Economic Analysis.

Sources

Wikipedia, Total cost, at https://en.wikipedia.org/wiki/Total_cost, accessed 7 May 2016.

Page created by: Ian Clark, last modified 7 May 2016.