Micro Equations Flashcards
(36 cards)
Total Cost- 2 Equations
Average Cost x Quantity
Total Fixed Cost + Total Variable Cost
Average Cost
Total Cost / Quantity
Average Variable Cost + Average Fixed Cost
Marginal Cost
Change in Total Cost / Change in Quantity
Total Revenue
Price x Quantity
Average Revenue
Price
Marginal Revenue
Change in Total Revenue / Change in Quantity
Total Product
Average Product x Quantity of Labour
Average Product
Total Product / Quantity of Labour
Marginal Product
Change in Total Product / Change in Quantity of Labour
Returns to Scale
%Output > %Input- Increasing Returns to Scale
%Output = %Input- Constant Returns to Scale
%Output < %Input- Decreasing Returns to Scale
Profit
Total Revenue - Total Cost
Supernormal Profit
Total Revenue > Total Cost
Normal Profit
Total Revenue = Total Cost
Profit Maximisation
Marginal Revenue = Marginal Cost
Revenue Maximisation
Marginal Revenue = 0
Sales Maximisation
Average Revenue = Average Cost
Profit Satisficing
Any point between profit max and sales max
Allocative Efficiency
Price = Marginal Cost
Marginal Social Benefit = Marginal Social Cost
Productive Efficiency
Minimum of AC
X-Inefficiency
On AC at any Q
Dynamic Efficiency
LR Supernormal
Minimum Efficient Scale
Min Output with all EoS exploited
Shutdown Condition
Average Revenue = Average Variable Cost
Concentration Ratio
N : Market Share
N= number of firms
