question
Marginal Product of Labor (MPL)
answer
MPL = change in Q / change in L
question
Average Product of Labor (APL)
answer
APL=Q/L
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Marginal Product of Capital (MPK)
answer
MPK=change in Q/change in K
question
Average Product of Capital (APK)
answer
APK=Q/K
question
Total Cost
answer
TC=TVC+TFC
question
Average Fixed Cost
answer
AFC=TFC/Q
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Average Variable Cost
answer
AVC= TVC/Q
question
Average Total Cost (short equation)
answer
TC/Q or (TFC + TVC)/Q
question
Average Total Cost (longer equation)
answer
ATC=AVC+AFC
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Marginal Cost (longer equation)
answer
MC=change in TC/change in Q = change in TVC/change in Q
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Marginal Cost (shorter equation)
answer
MC=W/MPL
question
Wage
answer
change in TVC/change in L
question
Profit Equations
answer
Profit= Price(Quantity)-Total Cost
Profit=(Price- ATC)Quantity
Profit=(Price- ATC)Quantity
question
Marginal Revenue
answer
change in total revenue/change in quantity
question
Marginal profit =
answer
marginal revenue - marginal cost
question
At the profit maximizing quantity...
answer
Marginal revenue = marginal cost (for all firms)
question
In pure competition...
answer
Price = Marginal revenue, due to the price taking assumption
question
Because MR=MC and Price=MR at the profit maximizing quantity...
answer
Price=MC (when P > AVC) in pure competition
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Shutdown condition for short run
answer
AVC > P
question
Equilibrium in the short run
answer
When QD=QS
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MR-MC =
answer
Marginal Profit
question
Marginal Profit is also = to
answer
change in profit/ change in Q
question
At the profit maximizing quantity, marginal profit =
answer
zero
question
Because MC=P in short run, the firm will shut down if...
answer
MC < AVC
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