Cost, Revenue, (Economics) – Flashcards
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business expenses that are not dependent on the level of goods or services produced by the business. They tend to be time-related, such as salaries or rents being paid per month, and are often referred to as overhead
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Fixed Cost
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costs that change in proportion to the good or service that a business produces.
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Variable Cost
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the period of time during which the number of firms in an industry and the amount of land and capital employed by existing firms towards the production of a good are fixed in quantity.
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Short Run
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A period of time in which all factors of production and costs are variable, and firms are able to adjust all costs
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Long Run
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The amount of money that a company actually receives during a specific period
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Revenue
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The difference between the revenue received from the sale of an output and the opportunity cost of the inputs used.
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Profit
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When economic profit is equal to zero.
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Normal Profit
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revenue left over after you subtract the costs. So basically anything thats above normal profit.
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Abnormal Profit
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as factors of production are added, increases in the output will become smaller.
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Law of Diminishing Returns
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the change in the total cost that arises when the quantity produced has an increment by unit. That is, it is the cost of producing one more unit of a good.
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Marginal Costs
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The increase in revenue that results from the sale of one additional unit of output.
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Marginal Revenue
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equal to total cost divided by the number of goods produced
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Average Cost
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The revenue received for selling a good per unit of output sold, found by dividing total revenue by the quantity of output. Also known as "Price"
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Average Revenue
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the cost-reducing advantages that allow a firm to produce at ATC as it expands its production in the long run, adding new labour, land and capital.
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Economies of Scale
