1. COST, Revenue, profit CHP. 18

2. 2 mins starter… List as many costs in bread factory as you can…. Which are Fixed and Variable costs?

3. BREAD FACTORY FIXED COSTS Rent VARIABLE COSTS Wages

4. Costs Fixed Costs (FC) – Do not change with output. Variable costs (VC) change with output. Total costs (TC) = FC + VC Average Cost (AC) = TC/Quantity

5. .p.78

6. Revenue 2 girls sell 18 glasses of lemonade for $10. How much money do they make? 18 x $10 = $180 Total Revenue (TR) is total sales TR = Price x Quantity

7. Profit This is what the entrepreneur gets after all costs have been paid. Profit is the driving force behind every business and firm in operation. Profit = TR – TC.

8. Can you figure out equations for Revenue ____ x____ Profit = ___ - _____ Total cost = ___ + VC Fc = VC = AVERAGE COST = ____

9. Try questions Chp. 18 Q.1, Q.2 & Glenn’s fishing Make sure you remember the difference between Variable and Fixed Cost.

10. Diagrams (Extension… ) TR TC FC VC