Production Costs

Question 1

What is profit?

Answer 1

The difference between the total revenue, and total costs received from sale of outputs

Question 2

How do you calculate profit?

Answer 2

Profit = total revenue - total costs

Question 3

What are production costs? And what are the two types of production costs?

Answer 3

The payments that the front page during the production process.
1. Variable costs.
2. Fixed cost.

Question 4

What are fixed costs?

Answer 4

Fixed costs are the costs of production that do not vary as output to changes for example, rent or insurance fees

Question 5

What are variable cost?

Answer 5

Variable costs are costs of production that’s very as output changes for example, cost of raw materials

Question 6

What are total costs?

Answer 6

the sum of fixed costs, and variable costs

Question 7

Defined the law of diminishing returns

Answer 7

the law of diminishing returns states that it has more units of the variable factor or added to the fixed factors, a change in total output, well at first increase, and then decrease

Question 8

When does increasing returns occur?

Answer 8

When a foam increases its very big factor of production, to a given fix the factor of production, and as a result, marginal, product increases

Question 9

When does diminishing returns occur?

Answer 9

when a firm increases is variable factor of production to a given fix factor of production, and as a result, marginal product decreases, but value is still positive

Question 10

When does decreasing returns occcur

Answer 10

When a firm increases its variable factor of production to a given fix factor, and as a result, marginal product falls to a negative value