Final Exam Flashcards
Where does marginal revenue lie on a normal demand function
Halfway below demand
Where does marginal revenue lie on a perfectly elastic demand
On demand
When demand is perfectly elastic, what are the products like
Homogenous/the same
When demand is perfectly inelastic, what are the products like
Different
Perfectly elastic customers
Marginal customers
Perfectly inelastic customers
Brand loyal customers
Top line
Total revenue
Total costs
Total fixed costs + total variable costs
Total revenue- total costs
Profit/net income
Bottom line
Profit/net income
Most sued company in the world
Walmart
Total fixed costs
Startup costs
Sunk costs
Unavoidable costs
Overhead costs
Level of output/use (invariant with respect to output)
The time period for which at least one input is fixed
Total fixed costs on a graph
Totally flat countryside
Slope=0
1980s
Increase labor, increase costs, decrease in quantity, price > costs
1990s
Decrease in labor, decrease in costs, increase in quantity
Production function
Increases at a decreasing rate
Free rider problem
Sabotage effect
Stop
Study your graphs
During the law of increasing returns
More efficient
Output cost won’t accelerate as quickly
Law of increasing returns
First part of
Law of diminishing returns
after some optimal level of capacity is reached, adding an additional factor of production will actually result in smaller increases in output
Tfc + tvc = tc
Mutually exclusive and collectively exhaustive
Tc shape=
TVC shape
Tc and TVC
Vertically parallel (not horizontally)
