Principles of Microeconomics / Unit 6 MIC 0513 short lesson, about 20 seconds
Fixed Cost, Variable Cost, Total Cost
Captions available
The idea
Fixed cost is the cost of fixed inputs, the same at any output, even zero. Variable cost is the cost of variable inputs and rises with output; total cost is their sum.
In practice
The bakery pays a hundred dollars a day for the oven, baking or not.
Where people slip
Fixed cost is total cost's vertical intercept: what the firm owes before the first loaf.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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