What are business costs and revenues?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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Business costs are the amount of money a business has to pay to carry out its operations.  These costs can generally be classified in one of two categories.  There are fixed costs, which do not change with the level of production.  For example, if you rent a building in which to run your business, the rent costs the same regardless of how much business you do.  There are also variable costs, which vary with the amount that you produce.  For example, if you sell hamburgers, the more you sell, the more meat and buns you need to buy.

Revenues are simpler.  They are just the amount of money that your firm takes in when it sells its goods or services.

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