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Unformatted text preview: o Profit = Total Revenue (Total Costs) Total Revenue = (P * Q) and is abbreviated as TR = (P * Q) Total Cost (abbrev. TC) The amount of money the firm has to incur in order to produce a product. Ranges of Profit Can be positive ( > 0, TR > TC), earnings Can be 0 (Break even) ( = 0; TR = TC), breakeven [includes O.C and cash outlay costs] Can be negative ( < 0; TR < TC), losses C. Total Costs TC = Explicit costs + implicit costs o Explicit costs Cash Outlay (actual money/economic cost) o Implicit costs Opportunity Costs...
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- Fall '07