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10 Cards in this Set
- Front
- Back
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Total Revenue Equation
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TR = P x Q
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Marginal Revenue
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the firm's change in total revenue from selling an additional unit.
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Elastic
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(responsiveness) change in price has a LARGE effect on quantity demanded
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Inelastic
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change in price has LITTLE effect on quantity demanded
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Price elasticity of Demand
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measures how responsive quantity demanded is to a price change
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Price Elasticity of Supply
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A measure of the responsiveness of quantity supplied to a price change
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Income elasticity of Demand
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∆D/∆I
Percentage change in demand divided by the percentage change in consumer income |
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Normal Goods have what type of income elasticity
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positive value
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Inferior Goods have what type of income elasticity
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negative value
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Consumer Surplus
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the difference between the most a consumer would par for a given quantity of a good and what the consumer actually pays.
(above equil. price.) |
