# formulas for econ

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The flashcards below were created by user ndumas2 on FreezingBlue Flashcards.

1. Profit is
total revenue - total cost
2. economic profit is
exlicit and implicit revenue - explicit and implicit cost
3. total cost is
total cost = fixed cost + variable cost
4. Average fixed costs (AFC)
equals fixed cost divided by quantity produced AFC = FC/Q
5. Average Variable costs AVC
equals variable cost divided by quanity produced AVC = VC/Q
6. Average total costs (ATC)
equals total cost divided by quantity produced ATC = TC/Q or ATC = AFC + AVC
7. Marginal cost (MC)
is the increase in total cost when output increases by one unit, MC = ^TC/^Q
8. the relationship between marginal cost and average cost
if MC > ATC,
then ATC is rising
9. the relationship between marginal cost and average cost
if MC > AVC
then AVC is rising
10. the relationship between marginal cost and average cost
If MC < ATC then
ATC is falling
11. the relationship between marginal cost and average cost
if MC < AVC then
then AVC is falling
12. the relationship between marginal cost and average cost
if MC = AVC and MC = ATC then
then AVC and ATC are at their minimum points

### Card Set Information

 Author: ndumas2 ID: 73922 Filename: formulas for econ Updated: 2011-03-20 00:50:27 Tags: econ forumulas Folders: Description: for chapter 12 Show Answers:

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