Formulas Flashcards
MC =
MC = derivative of TC
MR =
MR = derivative of TR
ATC =
ATC = TC/Q
How do we find P & Q for a normally priced consumer co-op?
To find P & Q for a normally priced co-op, set D=MC
aka: MVP = MC just like a producer co-op.
TR =
TR = P * Q
How do we find optimal Q for a consumer IOF?
IOF operates where MR=MC for Q
Where does MC = AC?
Where AC is at a minimum MC = AC
How do we find the profit of a consumer co-op?
Co-op profit = (MC - AC) *Q
Where do we find the maximum member welfare for a consumer co-op?
Max. member welfare where D=MC
What is the member welfare of a consumer co-op?
Member welfare = CS+Profit
How do we find Q for a single firm co-op that is a producer (buys inputs)?
Q & P @ MC = MVP
MPP =
MPP = derivative of TP = derivative of Y
MVP =
MVP = MPP*P(y)
How do we find the demand equation for X?
MVP = demand equation for X
NARP =
NARP = ((P(y)*Y)-FC)/X
Where is NARP at a maximum?
NARP is at a maximum where NARP = MVP
Is NARP the same for a monopsonist and a co-op?
Yes! NARP is the same for a monopsonist and a co-op, monopsonists just ignore it.
Where do we find NARP pricing?
NARP pricing @ NARP = MC
How do we find price for a consumer co-op?
MC = D for pricing of a consumer co-op
How do we find pricing for a producer co-op?
MC = MVP for pricing of a producer co-op.
What is the maximum price a producer coop can offer?
MVP = NARP gives us max NARP and max. pricing.
** at this price there will have to be quotas
How do we find P & Q for a monopoly?
Monopoly P & Q:
Q@ MR=MC ,
then up to D for P.
How do we find pricing for a competitive producer IOF?
MC = MVP
How do we solve a quadratic equation?
How do we find pricing for a monopsony?
Monopsony Q: MO = MVP
Monopsony P: MC @ Q we just found
How do we multiply an individual’s demand curve out to an aggregate demand curve?
Must put the equation into the form X=___xz
If a co-op is acting as a monopolist, how do we find member welfare?
CS + ((P(m)-MC)Q) + ((MC-AC)Q)
What is minimum cost pricing (consumer co-op)?
AC = MC
What is average cost pricing (consumer co-op)?
D = AC
*** P<MC here
Consumer co-op pricing when members factor patronage into price?
AC = D
** P<MC at that point.
MVP
MVP = MPP*Py
NARP
NARP = ((Py*Y)-FC))/X
How do we find the profit/patronage for a producer co-op?
(NARP - MVP)*Q
TO = ?
Total Outlay = X * MC = X * P
MO
Marginal Outlay = derivative of TO
How do we find Q for a producer IOF?
MO = MVP
What is NARP pricing for a producer co-op?
NARP = MC
What is the demand equation for a producer co-op? Y is output /sold, X is input/bought.
Py=f(y)
What is the supply equation for a producer co-op? Y is output/sold, X is input/bought.
Y = f(x) so Y = f(Px, Py)
MPP = ?
MPP = derivative of Y
MPP = Change in Y / Change in X
MVP = ?
MVP = MPP*Py
How do we calculate member welfare with a producer co-op?
MW = ((Py * Y)-(Px * X)-FC) + ((Px * X)-Space under dx(X0))
MW = (Py * Y)-(space under dx(X0))-FC
How do we find optimal membership for a consumer co-op?
Set D = MC = AC
- AC will be lowest
- MC won’t be higher than AC
- D will generally have to be a lot smaller than it currently is
you can take that price and put it back into the individual member demand curve - equal to the MVP from the individual production function before you multiply it by 24 to get aggregate demand. Then divide the total quantity you calculated at AC=MC by the individual or small x you calculated and that will tell you optimal membership.
Q (optimal membership)/X(individual)= M(ideal membership)
Where do we find optimal membership with a producer co-op?
NARP = MVP = S
How do we find TR for a producer co-op if we aren’t given an equation for it?
TR = P(y) * Q(y)
When looking at a producer co-op, what is the Y=…X…. equation referring to?
TP
How do we find the profit for a monopsony?
Profitmonopsony = (P(y) * Y)-(P(x) * X)-FC
How do we find P for maximum pricing of a producer co-op?
Plug the Q we found at MVP=NARP back into either MVP or NARP. DO NOT PLUG IT INTO MC!
If a co-op is acting as a monopolist, how do we find the total patronage?
((P-MC) * Q) + ((MC-AC) * Q)
What is the value of import quota?
(Cost of Production - world price) * imports = import quota value
What is the value of production quota?
(Cost of Production - Marginal Cost Price) * production quota = production quota value
How do we determine how much will be imported in a quota system?
Imports = Qty D - Production Quota
What’s the formula for import quota rent?
(Cost of Production - World Price) * (Qty D - Production Quota)
What is NARP?
Net Average Revenue Pricing
What is MPP?
Marginal Physical Product
What is CS?
Consumer Surplus
What is an IOF?
Investor Owned Firm
