Exam 3 Formulas Flashcards
1
Q
total fixed costs
A
TFC = r * k
2
Q
total variable costs
A
TVC = w * l
3
Q
total costs
A
TC = TFC +TVC (= rk + wl)
4
Q
average fixed cost
A
AFC = TFC/q
5
Q
average variable cost
A
AVC = TVC/q
6
Q
average total cost
A
ATC = TC/q
7
Q
marginal cost
A
MC = ΔTC/Δq
8
Q
total revenue
A
TR = p * q
9
Q
marginal revenue
A
MR = ΔTR/Δq
10
Q
marginal revenue product of labor
A
MRPL = MR * MPL
11
Q
profit
A
π = TR - TC
12
Q
hire workers until…
A
MRPL = w (wage)
13
Q
produce output until…
A
MR = MC
14
Q
to solve a payoff matrix…
A
π = (P - ATC) * q
