# Study guide microeconomics

Content type
User Generated
Rating
Showing Page:
1/4
STUDY GUIDE
Total Revenue, Total Cost, and
Profit.
Total Revenue: the amount a firm receives for the sale
of its output.
Total Cost: the market value of the inputs a firm uses in
production.
Profit: the firm’s total revenue minus its total cost.
PROFIT = TOTAL REVENUE TOTAL COST
Fixed and Variable Cost
Total Costs (TC)
TFC: Total Fixed Costs
TVC: Total Variable Costs
TC: Total Costs
TC = TFC + TVC

Showing Page:
2/4
Average Costs: the cost of each typical unit of
product
AFC: Average Fixed Costs
AVC: Average Variable Costs
ATC: Average Total Costs
o AFC = FC/Q ; AVC = VC/Q ; ATC= TC/Q
Marginal Cost (MC): measures the increase in total
cost that arises from an extra unit of production.
ELASTICITY
e=D
a
D
d
xP
d
P
a
- P
d
D
d
OR
e = D’
(P)
x P
D
ATC = AFC + AVC

Showing Page:
3/4

End of Preview - Want to read all 4 pages?
Access Now
Unformatted Attachment Preview
STUDY GUIDE ❖ Total Revenue, Total Cost, and Profit. ➢ Total Revenue: the amount a firm receives for the sale of its output. ➢ Total Cost: the market value of the inputs a firm uses in production. ➢ Profit: the firm’s total revenue minus its total cost. PROFIT = TOTAL REVENUE – TOTAL COST ❖ Fixed and Variable Cost ➢ Total Costs (TC) • TFC: Total Fixed Costs • TVC: Total Variable Costs • TC: Total Costs TC = TFC + TVC ➢ Average Costs: the cost of each typical unit of product • AFC: Average Fixed Costs • AVC: Average Variable Costs • ATC: Average Total Costs ATC = AFC + AVC o AFC = FC/Q ; AVC = VC/Q ; ATC= TC/Q ➢ Marginal Cost (MC): measures the increase in total cost that arises from an extra unit of production. ❖ ELASTICITY e=D – D a d Pa - Pd OR e = D’ (P) x P D xPd Dd ➢ Price Elasticity of Demand ep= ( change in Qd / average Qd) (change in Pr/ average Pr) • • • • If If If If ep< 1 : inelastic ep> 1 : elastic ep = 1 : unit elastic ep = 0 : perfectinelastic ➢ IncomeElasticity of Demand er = Da – Dd x Rd Ra – Rd Dd OR er = D’ (R) x R D ei= ( change in Qd/ average Qd) (change in Y/ average Y) Y = inc ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

### Review

Anonymous
Just what I was looking for! Super helpful.

Studypool
4.7
Indeed
4.5
Sitejabber
4.4