Profits Flashcards
1
Q
What is the condition for profit maximisation
A
Output where MC=MR
2
Q
What are the conditions for supernormal profits, losses and normal profits
A
Supernormal profit:
TR>TC
AR>AC
Normal profit:
TR=TC
AR=AC
Losses:
TC>TR
AC>AR
3
Q
Where is the short run shut down point
A
AVC=AR
4
Q
Where is the long run shut down point
A
AC=AR
