Search for notes by fellow students, in your own course and all over the country.
Browse our notes for titles which look like what you need, you can preview any of the notes via a sample of the contents. After you're happy these are the notes you're after simply pop them into your shopping cart.
Title: Concept of cost and revenue
Description: Classification of revenue, relation among total, marginal and average revenue. Explicit cost and its types(fixed and variable, etc) and implicit cost.
Description: Classification of revenue, relation among total, marginal and average revenue. Explicit cost and its types(fixed and variable, etc) and implicit cost.
Document Preview
Extracts from the notes are below, to see the PDF you'll receive please use the links above
# denotes important
Revenue- Money received by firm from sale of the product is called revenue
# Classification of revenue
1
...
Example ,
a firm sold 10 unit of product at price 2 than total revenue is 10*2= 20
2
...
It is revenue gained from one single unit of product sold
...
3
...
Example total revenue of 10 units is 100 and total revenue of 15 units
is 150 than marginal revenue will be 150-100= 50
...
At the point 4 of unit of good sold total revenue is maximum at 10 and marginal
revenue is 1 and more than 0
...
When marginal revenue became negative than total revenue is starts
falling, as shown at point 6 of unit of goods
...
That is why marginal curve remains lower than average curve
...
Explicit cost- this is those cash and payments that a firm pay to outsiders for their goods and
services like wages, rent, interest, advertisement, etc
...
Total fixed cost- These cost does not change with change in production
...
Like rent, insurance premium,
depreciation
...
2
...
It increases with increase in output
and decrease with decrease in output
...
It can be seen in chart that with increase in output from 0 to 1 variable cost also
increase firm 0 to 90
...
Total cost- When total fixed cost is added to total variable cost than the sum of both is
called total cost
...
4
...
In the
below chart average fixed cost of 5 unit is 20
...
5
...
In the below chart average variable cost of 5 unit is 18
...
6
...
Or simply by dividing total cost by output
...
In the following chart average cost for 5000 output is 1
...
4
...
Marginal cost- is addition to total cost by addition to output produced
...
In the below chart
marginal cost for 3 unit is 8, 27-19
...
B
...
Producers do not take
cost of this expenditure while calculating expenses because they belong to producer
...
Short notes
# Opportunity cost- is the alternative or opportunity cost of producing one unit of commodity x is the
amount of commodity y that must be scarified in order to use resources to produce x rather than y
...
He shifts himself to business
...
Opportunity cost includes both explicit and implicit cost
...
At this point the earning and
expenses are at same point which denotes the situation of no profit and no lose
...
At this point, firm is unable to recover its entire average cost
Title: Concept of cost and revenue
Description: Classification of revenue, relation among total, marginal and average revenue. Explicit cost and its types(fixed and variable, etc) and implicit cost.
Description: Classification of revenue, relation among total, marginal and average revenue. Explicit cost and its types(fixed and variable, etc) and implicit cost.