Total cost is equal to the sum of
A) total revenue and total cost.
B) total variable cost and total product.
C) total variable cost and total fixed cost.
D) total fixed cost and total product.
E) the marginal cost plus the total fixed cost plus the total variable cost.

Question

Quizplus · Accepted Answer

Total cost can be divided into two categories: fixed costs and variable costs. Fixed costs do not change with the level of production, whereas variable costs increase as production increases. Therefore, the correct answer is C, which includes both fixed and variable costs. A, B, and D are incorrect because they do not differentiate between fixed and variable costs. E is incorrect because it includes marginal cost, which is the cost of producing one additional unit, and is not relevant to total cost.

Total Cost Is Equal to the Sum of