What are the total fixed cost, total variable cost and total costs of a firm? How are they related?

Open in App

Solution

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. So, the TC curve is the vertical summation of TFC and TVC curves.

Suggest Corrections

Similar questions

What are the average fixed cost, average variable cost and total cost of a firm? How are they related?

Calculate Total Variable Cost and Marginal Cost from the following cost schedule of a firm whose Total Fixed Costs are Rs. 12 :

$\begin{matrix} Output (Units) & 1 & 2 & 3 & 4 Total cost (Rs) & 20 & 26 & 31 & 38 \end{matrix}$

State the behavior of Total Variable Cost. Draw Total Variable Cost, Total Cost and Total Fixed Cost curves in a single diagram

State the behavior of Total Variable Cost. Prepare a Schedule showing Total Variable Cost and Total Cost.

1, 000

5

400

5

Labour Employment (Units)	1	2	3	4	5	6	7	8	9	10
Output (Units)	5	10	17	25	40	56	70	82	90	95

Join BYJU'S Learning Program