costs and revenue Flashcards
1
Q
what is marginal revenue?
A
Addition to the total revenue resulting from the sale of one or more unit of the product
2
Q
marginal revenue formula
A
change in total revenue ➗change in output
3
Q
when is profit maximised?
A
When Marginal revenue = marginal costs
4
Q
when is revenue maximised?
A
When marginal revenue = 0
5
Q
what is normal profit?
A
the minimum profit a firm must make to stay in business however it is insufficient to attract new firms into the market
6
Q
what is abnormal profit/ supernormal profit?
A
Profit which is over normal profit
7
Q
what are unit costs?
A
the average cost per unit produced
8
Q
unit cost formula
A
total production costs in period ➗ total output in period
9
Q
what are diseconomies of scale?
A
As output increases, long-run average cost rises
10
Q
A
