Factors Payment
Labour
wage
Land
rent
Entrepreneur
Profit
Capital
Interest
Fixed costs are costs that:
Vary with the quantity of output produced.
Remain constant regardless of output level.
Increase as production decreases.
Include raw materials and labor wages.
Which of the following is an example of a variable cost for a bakery?
Rent for the bakery building
Salaries of full-time managers
Cost of flour and sugar
Annual insurance fees
Total cost (TC) is calculated as:
TC = TFC – TVC
TC = TFC + TVC
TC = TVC ÷ Quantity
TC = TFC × Quantity
Average fixed cost (AFC) is equal to:
TFC ÷ Quantity
TVC ÷ Quantity
TC ÷ Quantity
MC × Quantity
Marginal cost (MC) measures:
The total cost of producing all units.
The change in total cost from producing one more unit.
The average cost per unit produced.
The fixed cost per unit produced.
A firm’s total fixed cost (TFC) is $500, and total variable cost (TVC) for producing 10 units is $300. What is the total cost (TC) for 10 units?
$200
$500
$800
$1500
Which cost curve continually decreases as output increases?
Average total cost (ATC)
Average variable cost (AVC)
Marginal cost (MC)
Average fixed cost (AFC)