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20 Cards in this Set
- Front
- Back
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Avc= |
TVC / TQ |
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ATC= |
TC / Q star star star |
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MC= |
Change in TC / change in Q (plot at midpoint ) |
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MB= |
Change in TB/ change in Q |
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Profit = |
TR-TC or (P-ATC) x Q |
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Long run price = |
Falls to minimum ATC |
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break even price = |
Minimum ATC |
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Shutdown price = |
Minimum AVC |
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Profit maximizing Q = |
Where MC = MR of the last unit |
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MR = |
Change in TR/ change in Q |
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In perfect competition , market price = |
MC |
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Profit maximizing price |
Price where MR=MC |
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Horizontal MR curve = __ ___ in perfect competition |
Price taker |
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4 steps to find profit |
1-find Q where MR=MC 2-Find price at Q 3-find ATC at Q 4-(P-ATC) x Q = total profit |
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How to know if u should shut down or stay open |
Stay open if price = at or above AVC |
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Firms supply curve is the |
MC curve |
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Short run market equilibrium = |
Qs = Qd |
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3. Characteristics of perfect competition |
1- Many buyers and sellers 2-product standardized 3-free entry and exit |
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Firms will produce as long as they can cover |
VARIABLE COSTS + some fixed costs |
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Firms will produce at every price .... |
Above min ATC where P intersects MC curve |
