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Firm Costs and Revenue calculations - Coggle Diagram
Firm Costs and Revenue calculations
Fixed cost,Variable cost,average cost
Fixed cost is a cost which is constant no matter the output of goods produced.Examples-telephone bills,charges for machinery,rent.Formula-profit=total revenue-total cost
Variable cost is a cost which unlike fixed cost varies with the amount of output.Examples-Raw materials,Delivery costs,Commision.Formula-Total variable cost=variable cost per unit times quantity produced.
Markets: Shambhavi and Sarayu's work: link:
https://coggle.it/diagram/ZBKWW0GwolWe_ce8/t/markets
Revenue
Revenue is the money a firm generates from the sale of its goods/services to consumers
Calculations
Total revenue = price per unit x quantity sold
Average revenue = Total revenue/Quantity sold
Firms objectives
Prfoit maximization
Growth
Survival
Social welfare and environmental objectives
Profit & Loss
Profit (or loss) is the difference between the total revenue of a firm and its total cost (a surplus of money earned or deficit)
If total revenue > total cost, the firm is said to have made a profit. If total revenue < total cost, the firm is said to have made a loss
Profit (or loss) = total revenue - total cost
