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Fixed Costs - Costs that remain constant regardless of output, e.g. Rent, salaries, insurance

Variable Costs - Costs that vary accordingly to output, e.g. Wages, 0 hour contract, raw materials

FC + VC = TC
TVC = total variable cost
TC / output = ATC (average total cost)
MC (marginal cost) is the addition to TC when producing an extra unit of output

Private Costs - A cost incurred by an individual (firm or consumer) as part of its production or other economic transactions. e.g. Labour, taxes, fuel

External Costs - A cost that is associated with an economic transaction that is borne by a third party, e.g. Noise and air pollution

Private Cost + External Cost = Social Cost

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