Total Cost (TC):

Total cost of production in the short-run is the total payments made in respect of all fixed and variable inputs employed. That is to say the sum of all implicit and explicit fixed and variable costs.

TC = TFC + TVC

Average Total Cost (ATC) is the total cost per unit of output produced meaning it is TC divided by quantity of output produced (Q).

ATC = TC/Q

ATC may also be expressed as the sum of AFC and AVC. This is when we substitute

TC = TFC + TVC in the ATC equation as follows: