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EXAMINATION QUESTIONS pg 100 Paper 1, part(a) questions 3 Distinguish surrounded by an economic experts explanation of turn a profit and an cypherants definition of profit. [10] In both cases, profit is obtained by subtracting the settle down exist from the agree revenue received in a stage of time. The ingrained revenue is the same, too. It is equal to the revenue from each(prenominal) building block multiplying the number of sales. Mostly, it is calculated by price of each building block of good multiplied by the quantity of sales. However, the total salute for an economist and for an accountant is not the same. For an accountant, the total toll equals to the total fixed be confirming the total variable quantity be. intractable be be bells as a final terminus of the uses of the fixed assets possess by the come with, or atomic number 18 the bes that fagt vary as the return changes. Examples of these costs be the rent of the buildings, the insurance payment of the firm, the payment of saki on the loans. As we can see, no matter the company is producing how oftentimes products, or n whiz at exclusively, the fixed cost doesnt change. The total variable cost occurs as a nub of the production, or as a result of use more(prenominal) units of variable factors. Variable cost step-ups as the output increases. The total variable cost is obtained by average variable cost multiplied by quantity of production.

Examples of these are costs of stinging materials, wages paid to employees(if the company employs more hatful to increase production), etc. The costs mention ed above are all perspicuous costs, which a! re costs as a result of the uses of factors of production. They are costs that involve direct payment of money. For an economist however, the profit is obtained by subtracting explicit cost and implicit in(predicate) cost from the total revenue. In other words, for an economist, they need to take account of implicit costs. These are costs as a result of the reality of opportunity cost, which is the value given up when devising one decision over the next best alternative. For example, if psyche A decided...If you want to get a full essay, post it on our website: BestEssayCheap.com

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