They are associated with variable types of inputs. Examples of variable type costs are the costs of raw materials, the costs of energy and water, and hourly labor. Total costs are costs that include all fixed and variable type costs and are calculated by adding the totals of the two. Total costs are equal to fixed costs at zero levels of output and increase with output depending on the nature of the production function. Marginal costs are associated with an incremental unit of production and can be defined as the change in total cost or total variable cost due to a unit change in output.
Marginal costs comprise solely of variable type costs.
There are seven different cost types. Most markets in the performing arts are monopolistic types though a few markets existing in the smaller cities are of the oligopolistic type. If the entire live performing arts were to be considered a single industry, the opera company, the symphony orchestra, the dance groups and the resident theater companies in major cities are all competing with each other by offering competitive products that are unique but also substituteable as forms of artistic entertainment. Advertising functions to raise the level of demand for the specific firm's product and to make the product demand less price sensitive or inelastic. It also helps in the cultivation of taste and artistic culture.