cost, revenue, profit Flashcards
1
Q
what are fixed costs?
A
costs that do not change directly with the output. for example rent ( this can go up or down but is separate from production ).
2
Q
variable costs?
A
costs that are directly affected by the output ( e.g. raw material)
3
Q
how do you work out total costs?
A
FC + VC
4
Q
What is meant by the unit cost/ average cost?
A
the cost of producing - you work this out by :
Total costs
—————-
output
5
Q
what are marginal costs?
A
the cost of producing one unit formula = change in total costs ------------------------------- quantity
6
Q
what are social costs?
A
the implications of a business decisions are not always included in the businesses cost - for example driving somewhere uses petrol
7
Q
what is opportunity cost?
A
what a business could of spent/invested their money in to .
8
Q
what is profit ?
A
the difference between the amount earned and the amount spent
f = revenue - total costs
