total cost
Total cost is the whole bill — everything a firm must pay to produce a given amount of output in a given period. If a bakery's rent, wages, flour, electricity and everything else add up to 3,000 for the month it baked 5,000 loaves, then its total cost was 3,000. It is the simplest cost idea, and the one everything else is built on.
Total cost has two parts that you add together: fixed cost (the part that does not change with output, like rent) and variable cost (the part that rises as you make more, like flour). So total cost = fixed cost + variable cost. At zero output, total cost is not zero — you still owe the rent, so total cost equals the fixed cost. As output rises, the variable part grows, so the whole total cost curve starts at the fixed-cost level and climbs from there, typically getting steeper as diminishing returns make each extra unit harder to produce. Important: in economics this total cost includes opportunity cost — the value of what the owner's own money, time and premises could have earned elsewhere — not just the cash that leaves the till.
Total cost matters because profit is just total revenue minus total cost, so it is one half of every firm's scoreboard. But for deciding how much to produce, the total is too blunt a tool; what guides the firm is how the total changes — the marginal cost of one more unit — and how it spreads out — the average cost per unit. Those two, both derived from total cost, do the real work in the theory of supply.
A workshop pays 2,000 a month in fixed costs and 5 in materials and labour per chair (variable). Making 100 chairs, total cost = 2,000 + 100 x 5 = 2,500. Making 400 chairs, total cost = 2,000 + 2,000 = 4,000. The total never starts from zero — the 2,000 is owed even at zero chairs.
Total cost = fixed + variable. It starts at the fixed cost and climbs from there.
The economist's total cost includes the opportunity cost of the owner's own money and effort, so it is usually higher than the accountant's. This gap is exactly why a firm can show an accounting profit yet still be making an economic loss.