Studied by 0 peopleAverage Fixed Cost
(1) TFC÷Qs (2) ATC − AVC
(Quantity supplied to market by producers)
Average Variable Cost
(1) TVC÷Qs (2) ATC − AFC
Average Total Cost
AVC + AFC
Average Product
TP÷Units of Labor
Marginal Cost
∆ in TC ÷ ∆ in Qs
Marginal Product
∆ in TP ÷ ∆ in Labor
Total Cost
TFC + TVC
Total Revenue
P × Qs
Total Product
TR − TC
Average Revenue
TR ÷ Qs
Marginal Revenue
∆ in TR ÷ ∆ in Qs
XED (Cross-price Elasticity)
%∆ in QD of G₁ ÷ %∆ in P of G₂
Negative = Complementary Positive = Substitute
YED (Income Elasticity)
%∆ of QD ÷ %∆ of Y (Income)
Negative = Inferior Positive = Normal
PED (Elasticity of Demand)
%∆ in QD ÷ %∆ in P
Break Even Point
ATC intersects D
Productively Efficient
Lowest ATC
Allocatively Efficient
P = MC
Maximize Profit
MC = MR
Maximise Revenue
MR = 0
Socially Optimal Point
MC = D
Marginal Revenue Product (Change in revenue when one more worker is employed)
MP × P (For perfect competition) MP × MR (Imperfect competition)
Marginal Factor/Resource Cost (Cost of employing one more worker/machine)
∆ in TC ÷ ∆ in L
Note
Flashcard