costs and profit MR WHITE Flashcards
1
Q
What are fixed costs?
A
Costs that stay the same, it will never fluctuate due to output.
2
Q
What are variable costs?
A
Costs of production with change depending on output.
3
Q
What is total cost?
A
fixed cost + variable cost
4
Q
What is average cost?
A
Cost per unit
Total cost / output
5
Q
What is average fixed cost?
A
Total fixed cost / output
6
Q
What is average variable cost?
A
Total variable cost / output
7
Q
What is total revenue?
A
quantity sold x price
8
Q
What is profit?
A
The difference between revenue and costs
revenue - costs
9
Q
Why is profit so important?
A
Reinvestment, payment as dividends, attract new investors, growth and expansion.
