Supply Analysis — Economics STD 12 Commerce / Arts — Question

Total Cost (TC): It is the total expenditure incurred by a fir m on the factors of production required for the production of goods and services. Total cost is the sum of Total Fixed Cost (TFC) and Total Variable Cost (TVC). Total Fixed Cost is the cost incurred on fixed factors of production like land, factory, building, capital, etc. These factors cannot be changed in the short period. They remain constant. Total Variable Cost is the cost incurred on variable factors such as raw – materials, labour, etc. These factors can be varied or changed according to the change in output level. So the variable cost varies. Total Cost = Total Fixed Cost + Total Variable Cost
i.e., TC = TFC + TVC
TC increases as the level of output increases.

Total Revenue :
(Income) refers to total receipts of the firm from its sales of commodity. It is obtained by multiplying the price per unit of the commodity with the total number of units!; of commodity sold to the consumers. Thus, Total Revenue = Price per unit Total Number of units of commodity sold.
Example : If the firm sells lo units of a commodity at ₹ 100 per unit then total revenuewifibe TR = 100 x 10. TR= ₹ 1000