Types of cost Flashcards
1
Q
What are fixed costs ?
A
Costs that do not change with output
Rent , Insurance , Salary
2
Q
What are variable costs ?
A
Costs that change with output
Parking , wages , electricity
3
Q
What are stepped fixed costs ?
A
For a short time , fixed costs may increase
4
Q
What are total costs ?
A
Fixed costs + variable costs
5
Q
What is the equation for unit costs ?
A
Total cost / Units produced
6
Q
What are marginal costs ?
A
Cost of producing one more unit
7
Q
What are social costs ?
A
The cost that society bares for example pollution , noise pollution etc
8
Q
What is opportunity cost ?
A
Cost of making a decision ( losing out on the other option )
9
Q
What is the equation for contribution costs ?
A
Selling price - variable costs
( they go toward paying fixed costs )
10
Q
A
