Profit: - The amount of money a producer has left after all the costs, Productivity: - One measure of the degree of efficiency in the use of factors of production in the production process. It is measured in terms of output per unit., Average cost: - The cost of producing a unit (unit cost of production). AC = TC/Q, Total cost - All the costs of the firm added together. TC = TFC + TVC, Total revenue - The total income of a firm from the sale of its goods and services. > TR= P X Q, Average revenue (AR) - The revenue per unit sold. AR = TR/Q, Loss - When a firm’s revenue is less than its costs I.e. TR< TC, Economies of scale - The cost advantages a firm can gain by increasing the scale of production, leading to a fall in average cost., External economies of scale - are those that a firm benefits from as a member of an industry or because of location e.g. transport links improve, Technical/Managerial economies - large firms can purchase more specialist equipment/staff. , Bulk Buying - able to buy products at lower cost per unit , Division of labour - divide work up into separate, specialised tasks. , Financial economies - Risk-bearing - can borrow more and at better rates , Marketing economies - can afford more expensive advertising e.g. TV adverts , Research and development - can sink millions into something that might not work e.g. medical research, A negative of productivity - Labour replaced by machines. ,

Production - OCR - GCSE

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