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Total Cost and Total Revenue. - Economics

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Total Cost and Total Revenue.

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Solution

Total Revenue

Total revenue profit is a combination of two accounting principles. Total revenue is the income a business receives from the sale of all the goods produced. Total profit is determined by subtracting total costs from revenues. Total revenue is determined by multiplying the price received for each unit sold by the number of units sold. Total revenue profits are a product of subtracting total costs from total revenue

Total Costs

Economists include two types of costs in the total cost calculations. Explicit costs are items such as rents, productions costs and labor costs. Implicit cost or opportunity costs express the cost of giving up something tangible for the prospect of return at a later date. Total costs are the sum of explicit costs and implicit costs. Total costs provides broader cost accounting than a bookkeeper would document on a journal or financial report

Concept: Concept of National Income
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