The short-run total cost curve is the sum of which two components?
A)Short-run and long-run
B)Total variable cost curve and total fixed cost curve
C)Average cost curve and marginal cost curve
D)Economies of scale and economies of scope

Question

Quizplus · Accepted Answer

The short-run total cost curve is the sum of total variable cost and total fixed cost curves. This is because in the short run, some inputs are fixed and cannot be adjusted, so the total cost curve is made up of the variable costs of the inputs that can be adjusted and the fixed costs of the inputs that cannot be adjusted. The short-run total cost curve is the sum of total variable cost and total fixed cost curves. Total variable cost fluctuates with output as it includes costs that vary with output (e.g. labor, raw materials), whereas total fixed cost remains constant in the short-run (e.g. rent, insurance). Therefore, the sum of these two components represents the total cost of production in the short-run.

The Short-Run Total Cost Curve Is the Sum of Which