Which of the following statements is false?
In the short run: total cost = fixed cost + variable cost.
In the long run there are no fixed costs.
An explicit cost is a nonmonetary opportunity cost.
Variable costs are costs that change as output changes.

In the realm of economics, explicit costs are actually out-of-pocket expenses that a business actually pays, not just nonmonetary opportunity costs. Think of explicit costs as the cash flowing out of your business: wages, rent, and materials—money you can touch! Nonmonetary opportunity costs, on the other hand, are implicit costs—like the potential income you miss out on when you choose one investment over another.

When it comes to the long-run vs. short-run costs, it’s essential to remember that in the long run, all costs are variable, which is crucial for firms considering scaling up or modifying their production processes. Fixed costs, like rent for office space, become a thing of the past as businesses can adapt everything to fit their needs!