Total revenue

Fixed costs

costs that do not vary with output

Fixed capital

refers to the factories, offices, shops, machines, tools, equipment and furniture used in the production

Productivity

the amount of output that can be produced with a given quantity of resources

Average revenue

the average amount of money a firm receives from selling one unit of output AR = TR/output

Profit

the difference between total revenue and total costs Profit = TR-TC

Factors of production

the resources used to produce goods and services. They include land, labour, capital and enterprise

Average costs

the total costs divided by the pit[it (this has a diagram) AC = TC/output

Human capital

the value of an individual worker to a business

Total revenue

total receipts of a firm from the sale of any given quantity of a product

Variable costs

vary directly with output ( e.g. wages and raw materials)

Labour intensive

where production relies more heavily on labour relative to machinery

Capital intensive

where production relies more heavily on machinery relative to labour

Production

a process that involves converting resources into goods or services

Production

a process which involves converting resources into goods or services

Total costs

all the costs of producing a good or service added together TC= FC+VC

Working capital

also called circulating capital, stocks of raw materials and components that will be used up in the production

Entrepreneur

an individual who organizes the other factors of production and risks their own money in a business venture