00:01
Hello, everyone and welcome.
00:03
So with regards to the total cost, let's talk about the short run, and then let's talk about the long run.
00:18
So in the short run, your total cost is equal to your total fixed cost.
00:30
So that would be like if i was operating a shoe selling business, then the fixed cost would be like the machines that i have to import to, you know, manufacture the issues.
00:39
So that's a fixed cost.
00:41
No matter how many units i sell, that cost is going to be there.
00:44
I'm going to have to buy that machine.
00:46
Plus, the total variable cost, which is the cost that is contingent on the number of units you are producing.
00:54
So that's what happens in the short run.
00:59
And in the long run, though, what's happening is that your total fixed cost does not really matter.
01:06
In the long run, your total cost will be zero if the input, i mean, if the output is zero.
01:11
So this total fixed cost, it doesn't really apply in the long run.
01:16
Instead, in the long run, your total cost will be equal to the total variable cost.
01:23
You will disregard the fixed cost...