Economics topic 4 - Costs, revenues and profits Flashcards
Profit
Total revenue - total costs
Revenue
Amount of money a firm receives from selling its output (price x quantity)
This is the money coming into an organisation
Total costs
Total fixed costs + variable costs
Variable costs
Costs that rise as output levels are increased
Fixed costs
Costs that do not vary with the level of output
Average total cost
Average cost per unit of output
Break even
When a business is making neither a profit nor a loss
Profit margin
A ratio of probability calculated as net profits divided by cost of sales.
Output
The quantity of goods or services produced in a given time period, by a firm, industry or country
Costs
Money going out of an organisation
Sales revenue
Money coming into a business
What is profit?
Total revenue - total costs
This is the money made by the organisation
