What is the difference between the revenue and the cost functions?
Revenue Function, R(x) Total income from producing units. Cost Function, C(x) Total cost of producing the units. Profit Function, P(x) Total Income minus Total Cost. Marginal is rate of change of cost, revenue or profit with the respect to the number of units.
What is the relationship between a firm total revenue profit and total cost?
What is the relationship between a firm’s total revenue, profit, and total cost? The relationship between a firm’s total revenue, profit, and total cost is profit equals total revenue minus total costs. Give an example of an opportunity cost that an accountant might not count as a cost.
Which term indicates close relationship between cost and revenue?
Net income or net profit is the term usually associated with a sales revenue calculation that deducts all expenses, including taxes, interest, amortization and depreciation.
What is it called when total revenue and total cost are the same?
production level where total cost equals total revenue. total revenue. total amount earned by a firm from the sale of its products. marginal revenue.
How do you find total profit from total revenue and total cost?
= − Total Profit is Total Revenue minus Total Cost. Profits are the money left over after all costs have been subtracted out. Average Total Cost is equal to Total Costs divided by Quantity. This figure refers to the cost to produce each unit for a given quantity.
How is total profit calculated?
The formula to calculate profit is: Total Revenue – Total Expenses = Profit. Profit is determined by subtracting direct and indirect costs from all sales earned.
What kinds of costs are involved in making a decision to shut down?
When a firm is making the decision about whether to shut down, it considers only one kind of cost. In addition, it considers one aspect of revenue. The only cost that a firm should consider when making this decision is its average variable cost. Its total costs do not matter and neither do its fixed costs.