Discussion
Total cost of a Business :
Answer: A
The correct formula is Total Cost = Total Fixed Cost + Total Variable Cost.
Fixed costs, such as rent and salaries, do not change with output in the short run, while variable costs, such as raw materials and power, rise with output. Total cost at any level of output is the sum of the two:
\[ TC = TFC + TVC \]
Dividing, multiplying or subtracting the two components does not give total cost. Subtraction would give TFC - TVC, which can even be negative.
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