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 (π > 0, TR > TC), earnings • Can be 0 (Break even) (π = 0; TR = TC), breakeven [includes O.C and cash outlay costs] • Can be negative (π < 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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This note was uploaded on 04/15/2008 for the course ECON 100 taught by Professor Stephaniemartin during the Fall '07 term at Allegheny.
- Fall '07