- Total Revenue- the total amount of money a firm receives from selling goods and services. Price X Quantity= Total Revenue
- Fixed Cost- a cost that does not change no matter how much is produced. (Rent)
- Variable Cost- a cost that rises or falls depending how much is produced
- Marginal Cost- the cost of producing one more unit of a good. New Total Cost - Old Total Cost= Marginal Cost
Formulas
TFC + TVC = TC
AFC+ AVC = TC
TFC/Q = AFC
TVC/Q = AVC
TC/Q = ATC
TFC =AFC X Q
TVC = AVC X Q
So the relationship total revenue shares is price and quantity while such things as marginal cost depends pn the total cost of a specific number of quantity.
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