Exhibit 3. Summary of Profit, Revenue, and Cost Terms
#cfa #cfa-level-1 #economics #macroeconomics #reading-15-demand-and-supply-analysis-the-firm #subject-2-total-average-and-marginal-revenue
| Term | Calculation |
|---|
| Profit | |
| (Economic) profit | Total revenue minus total economic cost; (TR – TC) |
| Revenue | |
| Total revenue (TR) | Price times quantity (P × Q), or the sum of individual units sold times their respective prices; ∑(Pi × Qi) |
| Average revenue (AR) | Total revenue divided by quantity; (TR ÷ Q) |
| Marginal revenue (MR) | Change in total revenue divided by change in quantity; (∆TR ÷ ∆Q) |
| Costs | |
| Total fixed cost (TFC) | Sum of all fixed expenses; here defined to include all opportunity costs |
| Total variable cost (TVC) | Sum of all variable expenses, or per unit variable cost times quantity; (per unit VC × Q) |
| Total costs (TC) | Total fixed cost plus total variable cost; (TFC + TVC) |
| Average fixed cost (AFC) | Total fixed cost divided by quantity; (TFC ÷ Q) |
| Average variable cost (AVC) | Total variable cost divided by quantity; (TVC ÷ Q) |
| Average total cost (ATC) | Total cost divided by quantity; (TC ÷ Q) or (AFC + AVC) |
| Marginal cost (MC) | Change in total cost divided by change in quantity; (∆TC ÷ ∆Q) |
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Summary
| status | not read | | reprioritisations | |
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| last reprioritisation on | | | suggested re-reading day | |
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| started reading on | | | finished reading on | |
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Details