Formulas and Key Terms Flashcards
1
Q
Revenue
A
R = PQ
2
Q
Marginal Revenue
A
MR = ∆TR / ∆Q
3
Q
Profit
A
π = TR - TC
4
Q
Average Costs
A
AC = TC / Q
5
Q
Total Costs or Costs
A
- TC = TFC + TVC
or - C = VC + FC
6
Q
Marginal Costs
A
MC = ∆TC / ∆Q
7
Q
Average Fixed Costs
A
- AFC = AC - AVC
- AFC= TFC / Q
8
Q
Average Variable Costs
A
- AVC= TC - AFC
- AVC= TVC / Q
9
Q
Total Fixed Costs
A
- TFC = TC - TVC (if one value not given)
- All values stay the same
10
Q
Total Variable Costs
A
- TVC = TC - TFC
- TVC = VC x Q
11
Q
Average Revenue
A
AR = TR / Q
12
Q
Fixed Costs
A
FC = TC - VC
13
Q
V
Variable Costs
A
VC = TC - FC
14
Q
Define “Short run”
A
- When there is at least 1 fixed factor of production
15
Q
Define “Long run”
A
- When there are variable factors of production
