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