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Q. Evaluate Total Cost - Fixed and Variable ?
Total cost (TC) of the firm is a function of output (q). It would increase with the increase in output, which is, it differs directly with the output. In symbols, it can be written as
TC = ƒ (q)
Because the output is produced by variable and fixed factors, Total cost can be divided into two components: total variable cost (TVC) and total fixed cost (TFC).
TC = TFC + TVC
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