BUS 202 Lecture Notes - Lecture 16: Net Profit, Average Variable Cost, Marginal Revenue
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Avc average total cost (atc) average variable cost (avc) Total costs divided by quantity of output. p. 523. Total variable costs divided by quantity of output. p. 523 break-even analysis. A method of determining what sales volume must be reached before total revenue equals total costs. p. 526 demand. The quantity of a product that will be sold in the market at various prices for a specified period. p. 516 elastic demand elasticity of demand. A situation in which consumer demand is sensitive to changes in price. p. 518. Co(cid:374)su(cid:373)ers" respo(cid:374)sive(cid:374)ess or se(cid:374)sitivit(cid:455) to cha(cid:374)ges i(cid:374) price. p. 518 fixed cost. A cost that does not change as output is increased or decreased. p. 523 inelastic demand. A situation in which an increase or a decrease in price will not significantly affect demand for the product. p. 518 keystoning. The practice of setting prices by doubling the cost. p. 525 marginal cost (mc)