What This Topic Covers — Costs & Revenue of a Firm | IGCSE Economics

Exam Frequency Analysis

Past paper frequency (2018 to 2024)

This topic accounts for approximately 10% of your exam marks.

stable

Medium

Stable10%

Fixed vs variable costs, profit calculations, and average cost appear regularly across both Section A and Section B questions.

Every firm faces the same basic question: do its revenues from selling its product exceed the costs of making it? If yes, the firm makes a profit and can survive and grow; if no, the firm makes a loss and will eventually leave the market.

This topic looks at:

the costs a firm pays to produce its output (fixed and variable),
the revenue it earns from selling that output,
the profit (or loss) that results,
how average cost changes as the firm grows (economies and diseconomies of scale),
and why some firms grow large while others stay small.