Fixed+and+variable+costs,+total+costs,+average+cost,+price,+total+revenue+and+profit

This section of the syllabus will hopefully help you better understand the concept of profits. Watch the video below and then undertake the following activities. (Note that implicit costs and economic profit not relevant to IGCSE students so please ignore. (KISS).... Profit= Revenue-costs !) Ask for help if you need it. media type="file" key="Costs rev and profit activity.swf" width="524" height="524" align="center"

Student Activity: From the video above, work out the total revenue and toal costs for the following outputs: 0; 1000; 2000; 3000

Once you have shown your tables to the teacher and they are correct draw the TR,TC,FC and VC on a piece of Graph paper. It should look like this

Extension Activity: Work out a firm's Total costs, Average costs, total revenue and profits for output between 0-8000 units given the following information ( all figures are per month):

Rent: $3000 Loan repayments $ 1000 raw material costs $1 per unit Fuel costs $1 per unit Labour costs $1 per unit Selling Price $5 per unit

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