Eco Notes 4 Unit 1 1/16/15

Eco Notes 4 1/16/15

Equilibrium- point at which supply curve and demand curve intersect. Means economy using all resources efficiently.

Shortage QD>QS

Surplus QS>QD

Price Ceiling Government imposed maximum on how high you can be charged for a product or service

Price Floor government imposed minimum on how low a price can be charged on a product or service

Total revenue Price x Quantity

Marginal Revenue- the additional income from selling one more unit of a good

Fixed cost- a cost that does not change no matter how much is produced ex. Mortgage rent etc.

Fixed cost- doesn’t change

TVC= TC- TFC

TC= TFC+ TVC

MC= New TC- Old TC

AFC= TFC/ Quantity

AVC= TVC/Quantity

ATC =AFC + AVC or TC/Quantity