Fixed Cost of Demand, Supply and Price Elasticity

        Fixed costs are such costs which does not change with change in output. The fixed costs remain fixed and known as overheads. The example of fixed cost include depreciation, amount of rent and set up cost.  In simple words fixed cost are such expenses which the organization will have to pay free of any business activity (DK, 2012). 

Variable Cost of Fixed Cost of Demand, Supply and Price Elasticity

        Variable costs are such costs which change with change in output. The variable costs changes due to various factors and known as direct costs. The example of variable cost include raw material, amount of fuel and labor related costs. Variable cost are actually the total of marginal costs. As discussed earlier that variable cost are known as direct cost but it is not necessary that all variable costs are direct cost. For instance variable manufacturing overhead are indirect costs. The total of fixed and variable cost makes up the total cost (DK, 2012).

Total cost & Marginal cost of Fixed Cost of Demand, Supply and Price Elasticity

        The total cost is the total of both fixed and variable cost. The marginal cost is the cost of manufacturing an extra unit of output. In other words marginal cost is the change that occurs in the opportunity cost that increases due to the increase in quantity produced (Arnold, 2008).

Marginal Revenues of Fixed Cost of Demand, Supply and Price Elasticity

        It is the additional amount of revenue which is earned by the organization or business by selling an extra unit of the good. In other words it is known as unit revenue. If there is perfect competition in the market than the marginal revenue is equal to price which it charges from its customers by selling goods. However if monopoly exists in the market than the marginal revenue is always less than the price that it charge for the goods sold (Arnold, 2008).

References of Fixed Cost of Demand, Supply and Price Elasticity

Arnold, R. A. (2008). Economics . Cengage Learning.

DK. (2012). The Economics Book. Penguin.