How do we consider total cost for a given period of time if some costs are fixed and some costs are variable?
Answer: In general, costs of capital are fixed the short run. All costs are variable in the long run. While it is easy to think of variable costs as having a time component (we hire labor per unit of time), fixed costs are harder to consider as having a time component. Economists think in terms of opportunity costs. If you buy a computer, the money you used to buy the computer can no longer earn interest in some other investment per period of time. Therefore, even a fixed input has a time component.