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20 Cards in this Set
- Front
- Back
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How do you know when a company should shutdown?
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P<AVC
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Quantity Demanded/Supplied
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jus a number
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Quanity/Supply
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the whole curve
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Change in price is a movement_______?
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along the curve
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If a company has positive economic profit,equilibrium market price _____, and equilibrium market quantity _______.
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Decreases
Increases |
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If a company's marginal cost exceed its marginal revenue,to increase profit the company should _____ ?
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Raise prices
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If you have a negative externality the product will be
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oversupplied
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If the product is a public good or have a positive externality it will be _______ because of ____.
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undersupplied ...free rider problem
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If you have more elasticity then you pay _____ taxes
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less
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To find short run profit maximizing quantity for each firm, ___________?
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set MR(P)=MC
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To find short run profit maximizing quantity for the whole market, ______?
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set P=Demand
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To find long run profit maximizing quantity for each firm, __________?
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MC=ATC
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To find long run profit maximizing quantity for the whole market, ________?
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use price from individual firm and set it equal to demand.
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explicit costs are ones that _____?
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you pay for
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PPF curves are ones that are ______, and the hump goes ______?
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concave
away from the origin |
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What are the two equations for Elasticity of Demand?
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(1/slope)*(p/q)
Change in Quantity %/ Change in Price % |
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What are the rules for elasticity?
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Ed>1, elastic, luxury
Ed<1, inelastic, necessity |
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Profit Equation
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(Rev-ATC)*q
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midpoint formula
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(q-q)/(q+q)/(p-p)(p+p)
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Does AVC+AFC=ATC?
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yes
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