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econ 2 > Econ test 1 > Flashcards

Econ test 1 Flashcards

1
Q

Marginal Revenue Equation

A

ΔRevenue/ΔQuantity

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2
Q

Profit Max Needs 2 things

A

Marginal cost=marginal revenue

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3
Q

Marginal cost comes from

A

total cost

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4
Q

demand equation

A

P=y-intercept-slope*quantity

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5
Q

Price elasticity

A

%change in Q / %change in P

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6
Q

Demand Curve Labeling

A

Price on Y and Quantity on X

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7
Q

Revenue Curve labeling

A

Revenue on Y and Quantity on X

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8
Q

Revenue Maximizing is 1/2 of

A

Y-intercept in demand equation

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9
Q

Revenue Max Price is middle point of

A

demand curve

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10
Q

Demand equation inverse from Qa to Pa

A

Leave Qa and Pa as variables, solve for Pa.

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11
Q

Cross Price Elasticity

A

% change in Qa / % change Pb

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12
Q

% change is

A

new-old / old (74200-77200) / 77200

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13
Q

Elasticity-complements

A

When price B increases by 1%, sale of A decreases by 3.9%

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14
Q

Elasticity-substitutes

A

When price C decreases by 1%, sale of A decreases by 1.56%

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15
Q

Always tie cross price elasticity relative to 1% change.

A

yes

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16
Q

Marginal Revenue =

A

Marginal Cost

17
Q

Marginal Cost =

A

Marginal Revenue

18
Q

Profit=

A

Revenue-Cost

19
Q

Revenue curve looks like

A

Parabola

20
Q

Cost Curve looks like

A

S shape (changes in efficiency)

21
Q

Marginal Cost formula=

A

ΔTotal Cost/Quantity

22
Q

Fixed cost

A

amount of cost when sales are 0

23
Q

slope of marginal revenue is

A

twice steeper than slope of demand

24
Q

slope of demand curve

A

Δ price / Δ quantity

25
Q

If given demand equation and Marginal Cost still need…

A

Marginal revenue, set by doubling the slope of demand.

26
Q

price elasticity of profit maximizing P

A

(∆Q/∆P) × (P/Q)

27
Q

Marginal Benefit =

A

Marginal Cost

28
Q

Monopoly with set price, profit maximization determined by

A

Price relative to marginal cost.

econ 2 (1 decks)

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