Business Cost, Revenue And Profit Flashcards
1
Q
Fixed costs
A
Costs that do not vary with level of output
2
Q
Costs
A
Expenses that must be met when setting up and running a business
3
Q
Variable costs
A
Costs that change when output levels change
4
Q
Total costs
A
Fixed and variable costs added together
5
Q
Fixed costs examples
A
Rent, business rates, advertising, interest payments, research and development costs
6
Q
Variable costs examples
A
Raw materials, fuel, labor, packaging
7
Q
Total variable cost formula
A
TVC= VC x Q
8
Q
Total cost
A
Cost to a firm producing all output over a period of time
9
Q
Total cost formula
A
TC = TFC + TVC
10
Q
Average cost formula
A
AC = TC / QP
11
Q
Average cost curve
A
- Is U-shaped
- As output increases, AC fall at first, reach a minimum and then rise again
12
Q
Profit formula
A
P = TR - TC
