(i) Total fixed costs: Costs involved in employing fixed factors are fixed costs. Rent on land, interest payment on loan capital, salaries paid to permanent employees, etc. are fixed costs. It remains constant at all output levels, even if production is zero.
TFC curve becomes parallel to the output axis because TFC is constant at all levels of Q.
(ii) Total variable costs: Costs incurred by a firm on the use of variable factors are variable costs, like wage cost, cost of raw materials, payment for fuel and power used, etc. It is zero at zero output level.
TVC curve looks like an ‘inverted S’ because it rises at a slow pace, initially and then increases at an increasing rate. This is due to the law of variable proportion.
