Question

To the economist, total cost includes?

1) Fixed cost
2) Variable cost
3) Opportunity cost
4) All of the above

Answer 1

Total cost in economics includes fixed cost, variable cost, and opportunity cost

Step-by-step explanation:

In economics, total cost includes fixed cost, variable cost, and opportunity cost. Fixed cost refers to the costs that a firm must incur before producing any output, such as rent for the production facility or the purchase of equipment. Variable cost, on the other hand, is the cost that a firm incurs in the act of producing, such as the cost of raw materials or labor. Opportunity cost is the cost of forgoing the next best alternative when making a decision. Therefore, the correct answer is option 4) All of the above.