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In the simplest case, where cost is linear in output, the equation for the total semi-variable cost is as follows: [6] Y = a + b X {\displaystyle Y=a+bX} where Y {\displaystyle Y} is the total cost, a {\displaystyle a} is the fixed cost, b {\displaystyle b} is the variable cost per unit, and X {\displaystyle X} is the number of units (i.e. the ...
Average variable cost (AVC/SRAVC) (which is a short-run concept) is the variable cost (typically labor cost) per unit of output: SRAVC = wL / Q where w is the wage rate, L is the quantity of labor used, and Q is the quantity of output produced. The SRAVC curve plots the short-run average variable cost against the level of output and is ...
The marginal cost can also be calculated by finding the derivative of total cost or variable cost. Either of these derivatives work because the total cost includes variable cost and fixed cost, but fixed cost is a constant with a derivative of 0. The total cost of producing a specific level of output is the cost of all the factors of production.
Variable costs are costs that change as the quantity of the good or service that a business produces changes. [1] Variable costs are the sum of marginal costs over all units produced. They can also be considered normal costs. Fixed costs and variable costs make up the two components of total cost.
Total costs = fixed costs + (unit variable cost × number of units) Total revenue = sales price × number of unit These are linear because of the assumptions of constant costs and prices, and there is no distinction between units produced and units sold, as these are assumed to be equal.
Variable APY. APYs can be fixed or variable , depending on the type of deposit account. Fixed rates don't fluctuate when, say, the Fed rate changes, while variable APYs do.
In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. [ 1 ] [ 2 ] Sunk costs are contrasted with prospective costs , which are future costs that may be avoided if action is taken. [ 3 ]
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