Costs and revenue definitions – how many do you remember?

A period of time when at least one factor of production is fixed, usually rent or machinery

• Short run

• Total cost (TC)

• Fixed cost

• Variable costs (VC)

The total costs of production incurred by a firm. This is equal to fixed plus variable costs. In economics this includes all implicit costs as well as the explicit ones

• Short run

• Total cost (TC)

• Fixed cost

• Variable costs (VC)

Costs which change directly with output. Examples include direct labour costs as well as supplies and raw materials

• Short run

• Total cost (TC)

• Fixed cost

• Variable costs (VC)

A cost which is fixed, i.e. it does not vary with output e.g rent, machinery, administration and marketing costs

• Short run

• Total cost (TC)

• Fixed cost

• Variable costs (VC)

This is the total cost of production divided by the number of units produced (Q)

• Total revenue (TR)

• Average cost

• Total product

• Average product

The total output produced by a firm, measured in unit

• Total revenue (TR)

• Average cost

• Total product

• Average product

The average output produced per unit of variable cost

• Total revenue (TR)

• Average cost

• Total product

• Average product

The total revenue produced by a firm, measured in monetary terms usually in $. This is also sometimes called sales revenue

• Total revenue (TR)

• Average cost

• Total product

• Average product

A period of time when all factors of production are variable

• Average variable costs

• Marginal revenue (MR)

• Marginal cost

• Long run

The additional cost incurred when the firm produces one more unit or output

• Average variable costs

• Marginal revenue (MR)

• Marginal cost

• Long run