Formulas

Question	Answer
Revenue	Revenue = price x quantity
TC,FC and VC	Total costs = Fixed Costs + Variable Costs or TC = FC + VC. This means FC = TC – VC and VC = TC ‐ FC
Average cost and variable cost per unit	Average costs = Total Cost / Output
Profit	Profit = revenue – total costs
Gross profit	Gross profit = revenue – variable costs
Net profit	Net profit = revenue – total costs
Contribution per unit	Contribution per unit = selling price per unit – unit variable costs
Total contribution	Total contribution = contribution per unit x number of items sold
Break even	break even level of output = fixed costs/contribution per unit
Capacity utilisation	current output/ maximum output x 100
Price elasticity	PED = percentage change in demand of good X / percentage change in price of good X.
Income elasticity	YED = percentage change in demand / percentage change in income

Resource summary

	Created by Kaisha Revell about 8 years ago