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Learning objective

Understand the different types of production costs, including total cost (TC), average total cost (ATC), fixed cost (FC), variable cost (VC), average fixed cost (AFC), and average variable cost (AVC). Note that marginal cost is not included.

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  • Practise with linked questions.
Cambridge IGCSE EconomicsSubject content

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Quick explanation

Understand the different types of production costs, including total cost (TC), average total cost (ATC), fixed cost (FC), variable cost (VC), average fixed cost (AFC), and average variable cost (AVC). Note that marginal cost is not included

  • This point belongs to Firms’ costs, revenue and objectives, especially Firms’ costs, revenue and objectives outcomes.
  • You need to be able to understand the different types of production costs, including total cost (TC), average total cost (ATC), fixed cost (FC), variable cost (VC), average fixed cost (AFC), and average variable cost (AVC). Note that marginal cost is not included.
  • The key ideas to know are Define and Describe.
  • Use the linked flashcards and practice questions to check recall, then practise applying the idea in an exam-style answer.

Key concepts

DefineDescribe

Why it matters

This objective helps connect Firms’ costs, revenue and objectives outcomes to exam-style questions, flashcards, and revision notes for Firms’ costs, revenue and objectives.

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Paper 2 structured question: Firms’ costs, revenue and objectives

Paper 2Structured Questions3 marks

Description

Production Cost Analysis

Calculate the Average Total Cost (ATC), Average Fixed Cost (AFC), and Average Variable Cost (AVC) for the company.

  1. a

    Calculate the Average Total Cost (ATC), Average Fixed Cost (AFC), and Average Variable Cost (AVC).

    Aim for approximately 3 distinct marking points.

    [3]
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