Average fixed cost
fc/q= average fixed costs
Overhead
Total fixed costs
Variable costs
Cost that change when the businesses rate of operation or output changes
tc-fc=vc
Average variable costs
vc/q= average variable costs
Total cost
The sum of the fixed and variable costs
fc+vc=tc
Average total cost
tc/q=average total cost
Marginal cost
The extra cost incurred when producing one more unit of output
tc2-tc1/mp
E-Commerce
Electronic business conducted over the Internet
Break-even point
Level of production that generates just enough revenue to cover its total operating costs
Total revenue
All the revenue that a business receives
P*Q=tc
Average total revenue
tr/q
Marginal revenue
The extra revenue a business receives from the production and sale of one additional unit of output
tr2-tr1/mp
Marginal analysis
Type of decision-making that compares the extra benefits of an action to the extra cost of taking the action
Profit
tr-tc=profit/loss
Profit – maximizing quantity of output
It is reached when marginal cost and marginal revenue are equal
Fixed costs
Costs that an organization incurs even if there is little to no activity
tc-vc =fc
