Final answer:
In a short-run perspective, a firm's total costs can be divided into fixed costs and variable costs. Fixed costs are the costs that a firm must incur before producing any output and do not change regardless of the level of production. Variable costs, on the other hand, are the costs that a firm incurs in the act of producing and typically show diminishing marginal returns as production increases.
Step-by-step explanation:
In a short-run perspective, a firm's total costs can be divided into fixed costs and variable costs. Fixed costs are the costs that a firm must incur before producing any output and do not change regardless of the level of production. Variable costs, on the other hand, are the costs that a firm incurs in the act of producing and typically show diminishing marginal returns as production increases.
For a small publishing company planning to publish a new book, the production costs would include both fixed costs (such as editing) and variable costs (such as printing). The fixed costs are one-time costs that the company needs to pay regardless of the quantity of books produced. Whereas variable costs would increase with an increase in the number of books printed.
An example of a fixed cost for the publishing company would be the cost of hiring an editor to edit the book. This cost would remain the same regardless of the quantity of books produced. An example of a variable cost would be the cost of printing each book, which would increase with the number of books printed.