Revenues + Expenses and Fixed + Variable Costs
What does price per unit equal?
fixed costs plus variable costs per unit
What happens before marginal product of labor decreases?
it increases
when the contribution margin is less than fixed costs
money is lost
expenses
money spent or cost incurred in a organization efforts to generate revenue
revenue
total income of a business
variable costs
a cost the varies with the level of output
fixed costs
business costs, such as rent, that are constant whatever the quantity of goods or services produced (only apple to short term)
how is revenue calculated?
calculated by multiplying the quantity of goods sold by the price of the goods
average total cost
equals total cost/ quantity produced (TC/Q) total costs over quantity
marginal cost
the added cost per one unit sold
marginal product of labor
the added output after adding one more unit of labor
contribution margin
the amount of revenue available for use in paying the business's fixed cost
break even point
the production level where total revenue equals total expenses
if the contribution margin exceeds fixed costs...
there is a profit