Costs of Production
Fixed Costs- A cost that doesn't change no matter how much is produced
Ex: Mortgage
Variable Costs- A cost that rises or falls depending upon how much is produced.
Ex: Electricity bills
Total Costs- Fixed Cost + Variable Cost
Marginal Revenue- The additional income from selling one more unit of a good
Marginal Cost- The cost of producing one more unit of a good.
Total Revenue- Price x Quantity
Formulas:
TC=TFC+TVCATC= AFC+AVC
AFC= TFC/Q
AVC= TVC/Q
ATC= TC/Q
TC= ATC x Q
TFC= AFC x Q
TVC= AVC x Q
MC = (New TC) - (Old TC)
Variables
Q: Quantity
TFC: Total Fixed cost
TVC: Total Variable Cost
TC: Total Cost
MC: Marginal Cost
ATC: Average Fixed Cost
AVC: Average Variable Cost
AFC: Average Total Cost
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| Source: http://www.economicsdiscussion.net/production/cost-of-production/short-run-cost-of-production-with-diagram/16366 |
I like your differentiations among these terms but perhaps you could include the formulas on how to find all the costs of production such as the AFC, AVC, ATC, TVC, etc.
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