Unit 3 – The story so far Three key areas: Revenues Costs Profit.

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Unit 3 – The story so far Three key areas: Revenues Costs Profit

Revenues Define the following: -Total revenue -Average revenue -Marginal revenue Draw and label a ‘normal’ average revenue and marginal revenue curve and write a quick explanation.

Costs Define the following: -Economic cost -Fixed cost -Variable cost -Semi-variable cost Draw and label a ‘normal’ short run average fixed cost, average variable cost and marginal cost and write a quick explanation.

What is the law of diminishing returns?

Explain this:

Profit Define the following: -Break even point -Normal profit -Supernormal profit -MC=MR Draw and label a ‘normal’ MC and MR diagram, showing a decrease in costs and a decrease in revenue and write a quick explanation. What is the ‘shut down point’ in the short run?