Revenue
This is calculated by multiplying quantity sold by price.
What is Total Revenue?
These costs do not change with output.
What are Fixed Costs?
This happens to average costs when firms benefit from economies of scale.
What is average costs fall?
This is found by subtracting total costs from total revenue.
What is Profit?
This is the additional revenue earned from selling one more unit.
What is Marginal Revenue?
Raw materials and hourly wages are examples of these costs.
What are Variable Costs?
Buying raw materials in bulk at lower prices is this type of economy.
What are Purchasing Economies?
This type of profit occurs when total revenue equals total costs.
What is Normal Profit?
When demand is elastic and price falls, this happens to total revenue.
What is total revenue increases?
This formula equals Fixed Costs plus Variable Costs.
What is Total Costs (TC = FC + VC)?
Using advanced machinery is an example of this type of economy.
What are Technical Economies?
This type of profit occurs when total revenue is greater than total costs.
What is Supernormal Profit?
This type of demand means consumers are not very sensitive to price changes.
What is Inelastic Demand?
These costs rise directly as output increases.
What are Variable Costs?
These occur when a firm becomes too large and average costs rise.
What are Diseconomies of Scale?
Businesses use this to reward shareholders and expand operations.
What is Profit?
This section of the demand curve is unitary elastic.
What is the middle of the demand curve?
These costs still exist even if output is zero.
What are Fixed Costs?
Communication problems and bureaucracy are causes of these.
What are Diseconomies of Scale?
This is the minimum profit needed to keep resources in current use.
What is Normal Profit?