Fixed cost - Revision history

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Energy>Jmdonev at 21:20, 16 January 2020

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	[[Category:Done ~~2018~~-05-18]]		[[Category:Done 2020-01-31]]
	[[File:Fixed_Total_Variable_cost.png\|thumb\|400px\|right\| Figure 1. A graph showing how the fixed costs stay constant, the variable costs change and the total cost is the sum of the two.<ref name = graph>Graph made by a member of the energy education team.</ref>]]		[[File:Fixed_Total_Variable_cost.png\|thumb\|400px\|right\| Figure 1. A graph showing how the fixed costs stay constant, the variable costs change and the total cost is the sum of the two.<ref name = graph>Graph made by a member of the energy education team.</ref>]]
	[[File:Average_Fixed_Total_Variable_cost.png\|thumb\|400px\|right\| Figure 2. A graph showing how the average fixed cost, the average variable cost change with units produced. Note how the variable cost decreases up to a point, but with more units produced, the average variable cost starts to increase again.<ref name = graph/>]]		[[File:Average_Fixed_Total_Variable_cost.png\|thumb\|400px\|right\| Figure 2. A graph showing how the average fixed cost, the average variable cost change with units produced. Note how the variable cost decreases up to a point, but with more units produced, the average variable cost starts to increase again.<ref name = graph/>]]
	A '''cost''' is something that is incurred by a firm, an individual or society while producing or consuming [[goods and services]]. It is the consumption of resources such as labour time, [[capital]], materials, [[fuel]]s, etc. In economics, all resources are valued at their [[opportunity cost]], which is the value of the alternative use of the resources. Costs are defined in a variety of ways and under a variety of assumptions that affect their value. The opposite of a cost is a benefit and often both are considered together. For example, net cost is the difference between gross costs and benefits.<ref>A. Verbruggen, W. Moomaw and J. Nyboer. ''Glossary of terms used in the: Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN).'' [Onlince], Available: http://www.ipcc.ch/publications_and_data/publications_and_data_glossary.shtml [May.29, 2016]</ref>		A '''cost''' is something that is incurred by a firm, an individual or society while producing or consuming [[goods and services]]. It is the consumption of resources such as labour time, [[capital]], materials, [[fuel]]s, etc. In economics, all resources are valued at their [[opportunity cost]], which is the value of the alternative use of the resources. Costs are defined in a variety of ways and under a variety of assumptions that affect their value. The opposite of a cost is a benefit and often both are considered together (see [[Cost benefit analysis]]). For example, [[net cost]] is the difference between gross costs and benefits.<ref>A. Verbruggen, W. Moomaw and J. Nyboer. ''Glossary of terms used in the: Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN).'' [Onlince], Available: http://www.ipcc.ch/publications_and_data/publications_and_data_glossary.shtml [May.29, 2016]</ref>

	==Fixed Cost==		==Fixed Cost==
	<onlyinclude>Fixed costs are costs that a firm will incur regardless of its output and are sometimes referred to as '''overhead'''. These can be costs such as insurance, rent, utilities and others. These costs are incurred even if the company doesn't generate revenue.</onlyinclude> For example, if a [[gasoline station\|gas station]] does not open for a whole month it still has to pay its lease rate for the land even though it was not in operation .<ref>A. Goolsbee, S. Levitt and C. Syverson. ''Microeconomics''. New York: Worth Publishers, 2013, pp. 270.</ref> One way to avoid incurring large costs when production stops is to rid a firm of the things that cause these costs, for example, if a firm has to stop producing and is going to go out of business, to avoid larger rent payments the firm could sublet their real estate space to another firm.		<onlyinclude>Fixed costs are costs that a firm will incur regardless of its output and are sometimes referred to as '''overhead'''. These can be costs such as insurance, rent, utilities and others. These costs are incurred even if the company doesn't generate revenue.</onlyinclude> For example, if a [[gasoline station\|gas station]] does not open for a whole month it still has to pay its lease rate for the land even though it was not in operation.<ref>A. Goolsbee, S. Levitt and C. Syverson. ''Microeconomics''. New York: Worth Publishers, 2013, pp. 270.</ref> One way to avoid incurring large costs when production stops is to rid a firm of the things that cause these costs, for example, if a firm has to stop producing and is going to go out of business, to avoid larger rent payments the firm could sublet their real estate space to another firm.

	As seen in figure 1, the fixed costs don't change when more units are produced. In contrast, [[variable cost]] goes up as more units are produced.		As seen in figure 1, the fixed costs don't change when more units are produced. In contrast, [[variable cost]] goes up as more units are produced.
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	*[[Economies of scale]]		*[[Economies of scale]]
	*[[Costs for a firm]]		*[[Costs for a firm]]
			*Or explore a [[Special:Random\|random page]]

	==References==		==References==
	{{reflist}}		{{reflist}}
	[[Category: Uploaded]]		[[Category: Uploaded]]

Jmdonev: 1 revision imported

2018-05-18T22:53:08Z

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Jmdonev at 19:38, 11 May 2018

2018-05-11T19:38:56Z

← Older revision		Revision as of 19:38, 11 May 2018
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	[[Category:Done ~~2016~~-04-30]]		[[Category:Done 2018-05-18]]
	[[File:Fixed_Total_Variable_cost.png\|thumb\|400px\|right\| Figure 1. A graph showing how the fixed costs stay constant, the variable costs change and the total cost is the sum of the two.<ref name = graph>Graph made by a member of the energy education team.</ref>]]		[[File:Fixed_Total_Variable_cost.png\|thumb\|400px\|right\| Figure 1. A graph showing how the fixed costs stay constant, the variable costs change and the total cost is the sum of the two.<ref name = graph>Graph made by a member of the energy education team.</ref>]]
	[[File:Average_Fixed_Total_Variable_cost.png\|thumb\|400px\|right\| Figure 2. A graph showing how the average fixed cost, the average variable cost change with units produced. Note how the variable cost decreases up to a point, but with more units produced, the average variable cost starts to increase again.<ref name = graph/>]]		[[File:Average_Fixed_Total_Variable_cost.png\|thumb\|400px\|right\| Figure 2. A graph showing how the average fixed cost, the average variable cost change with units produced. Note how the variable cost decreases up to a point, but with more units produced, the average variable cost starts to increase again.<ref name = graph/>]]
	A '''cost''' is something that is incurred by a firm, an individual or society while producing or consuming [[goods and services]]. It is the consumption of resources such as labour time, [[capital]], materials, [[fuel]]s, etc. In economics, all resources are valued at their [[opportunity cost]], which is the value of the alternative use of the resources. Costs are defined in a variety of ways and under a variety of assumptions that affect their value. The opposite of a cost is a benefit and often both are considered together~~, for~~ example, net cost is the difference between gross costs and benefits.<ref>A. Verbruggen, W. Moomaw and J. Nyboer. ''Glossary of terms used in the: Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN).'' [Onlince], Available: http://www.ipcc.ch/publications_and_data/publications_and_data_glossary.shtml [May.29, 2016]</ref>		A '''cost''' is something that is incurred by a firm, an individual or society while producing or consuming [[goods and services]]. It is the consumption of resources such as labour time, [[capital]], materials, [[fuel]]s, etc. In economics, all resources are valued at their [[opportunity cost]], which is the value of the alternative use of the resources. Costs are defined in a variety of ways and under a variety of assumptions that affect their value. The opposite of a cost is a benefit and often both are considered together. For example, net cost is the difference between gross costs and benefits.<ref>A. Verbruggen, W. Moomaw and J. Nyboer. ''Glossary of terms used in the: Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN).'' [Onlince], Available: http://www.ipcc.ch/publications_and_data/publications_and_data_glossary.shtml [May.29, 2016]</ref>

	==Fixed Cost==		==Fixed Cost==
	<onlyinclude>Fixed costs are costs that a firm will incur regardless of its output and are sometimes referred to as '''overhead'''. These can be costs such as insurance, rent, utilities and others. These costs are incurred even if the company doesn't ~~produce~~.</onlyinclude> For example, if a [[gasoline station\|gas station]] does not open for a whole month it still has to pay its lease rate for the land even though it was not in operation .<ref>A. Goolsbee, S. Levitt and C. Syverson. ''Microeconomics''. New York: Worth Publishers, 2013, pp. 270.</ref> One way to avoid incurring large costs when production stops is to rid a firm of the things that cause these costs, for example, if a firm has to stop producing and is going to go out of business, to avoid larger rent payments the firm could sublet their real estate space to another firm.		<onlyinclude>Fixed costs are costs that a firm will incur regardless of its output and are sometimes referred to as '''overhead'''. These can be costs such as insurance, rent, utilities and others. These costs are incurred even if the company doesn't generate revenue.</onlyinclude> For example, if a [[gasoline station\|gas station]] does not open for a whole month it still has to pay its lease rate for the land even though it was not in operation .<ref>A. Goolsbee, S. Levitt and C. Syverson. ''Microeconomics''. New York: Worth Publishers, 2013, pp. 270.</ref> One way to avoid incurring large costs when production stops is to rid a firm of the things that cause these costs, for example, if a firm has to stop producing and is going to go out of business, to avoid larger rent payments the firm could sublet their real estate space to another firm.

	As seen in figure 1, the fixed costs don't change when more units are produced. [[~~Variable~~ cost]]~~, by contrast,~~ goes up as more units are produced.		As seen in figure 1, the fixed costs don't change when more units are produced. In contrast, [[variable cost]] goes up as more units are produced.

	===Average Fixed Cost===		===Average Fixed Cost===
	The '''average fixed cost (AFC)''' is simply the fixed cost divided by the quantity produced showing the fixed cost per-unit.<br />		The '''average fixed cost (AFC)''' is simply the fixed cost divided by the quantity produced showing the fixed cost per-unit.<br />

	::::::::::::'''AFC'''= <m>\frac{FC}{Q}</m><br />		::::::::::::'''AFC'''= <math>\frac{FC}{Q}</math><br />

	This means that the average fixed cost will go down the more units produced (see figure 2). As opposed to [[average variable cost]], which can go down or up with more units produced.		This means that the average fixed cost will go down the more units produced (see figure 2). As opposed to [[average variable cost]], which can go down or up with more units produced.
	==~~See Also~~==
			== For Further Reading ==
			For further information please see the related pages below:
	*[[Total cost]]		*[[Total cost]]
	*[[Variable cost]]		*[[Variable cost]]
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	==References==		==References==
	{{reflist}}		{{reflist}}
			[[Category: Uploaded]]

Jmdonev: 1 revision imported: From the summer

2016-09-17T22:29:51Z

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Jmdonev at 04:32, 4 September 2016

2016-09-04T04:32:41Z

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[[Category:Done 2016-04-30]]
[[File:Fixed_Total_Variable_cost.png|thumb|400px|right| Figure 1. A graph showing how the fixed costs stay constant, the variable costs change and the total cost is the sum of the two.<ref name = graph>Graph made by a member of the energy education team.</ref>]]
[[File:Average_Fixed_Total_Variable_cost.png|thumb|400px|right| Figure 2. A graph showing how the average fixed cost, the average variable cost change with units produced. Note how the variable cost decreases up to a point, but with more units produced, the average variable cost starts to increase again.<ref name = graph/>]]
A '''cost''' is something that is incurred by a firm, an individual or society while producing or consuming [[goods and services]]. It is the consumption of resources such as labour time, [[capital]], materials, [[fuel]]s, etc. In economics, all resources are valued at their [[opportunity cost]], which is the value of the alternative use of the resources. Costs are defined in a variety of ways and under a variety of assumptions that affect their value. The opposite of a cost is a benefit and often both are considered together, for example, net cost is the difference between gross costs and benefits.<ref>A. Verbruggen, W. Moomaw and J. Nyboer. ''Glossary of terms used in the: Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN).'' [Onlince], Available: http://www.ipcc.ch/publications_and_data/publications_and_data_glossary.shtml [May.29, 2016]</ref>

==Fixed Cost==
<onlyinclude>Fixed costs are costs that a firm will incur regardless of its output and are sometimes referred to as '''overhead'''. These can be costs such as insurance, rent, utilities and others. These costs are incurred even if the company doesn't produce.</onlyinclude> For example, if a [[gasoline station|gas station]] does not open for a whole month it still has to pay its lease rate for the land even though it was not in operation .<ref>A. Goolsbee, S. Levitt and C. Syverson. ''Microeconomics''. New York: Worth Publishers, 2013, pp. 270.</ref> One way to avoid incurring large costs when production stops is to rid a firm of the things that cause these costs, for example, if a firm has to stop producing and is going to go out of business, to avoid larger rent payments the firm could sublet their real estate space to another firm.

As seen in figure 1, the fixed costs don't change when more units are produced. [[Variable cost]], by contrast, goes up as more units are produced.

===Average Fixed Cost===
The '''average fixed cost (AFC)''' is simply the fixed cost divided by the quantity produced showing the fixed cost per-unit.<br />

::::::::::::'''AFC'''= <m>\frac{FC}{Q}</m><br />

This means that the average fixed cost will go down the more units produced (see figure 2). As opposed to [[average variable cost]], which can go down or up with more units produced.
==See Also==
*[[Total cost]]
*[[Variable cost]]
*[[Marginal cost]]
*[[Economies of scale]]
*[[Costs for a firm]]

==References==
{{reflist}}