Cost and Revenue Concepts

Front

What is Total Cost (TC)?

Back

The sum of fixed costs (costs that do not change with output) and variable costs (costs that change with output).

Front

What are Fixed Costs (FC)?

Back

Costs that remain constant regardless of the level of output (e.g., rent, salaries).

Front

What are Variable Costs (VC)?

Back

Costs that vary with the level of output (e.g., raw materials, labor).

Front

What is the formula for Total Cost (TC)?

Back

TC = FC + VC

Front

What is the formula for Average Total Cost (ATC)?

Back

ATC = TC / Q

Front

What is Average Total Cost (ATC)?

Back

Total cost per unit of output.

Front

What is the formula for Average Fixed Cost (AFC)?

Back

AFC = FC / Q

Front

What is Average Fixed Cost (AFC)?

Back

Fixed cost per unit of output.

Front

What is the formula for Average Variable Cost (AVC)?

Back

AVC = VC / Q

Front

What is Marginal Cost (MC)?

Back

The additional cost of producing one more unit of output.