Profits

Question 1

What is profit

Answer 1

Difference between the revenue and costs generated

Question 2

What is supernormal profit

Answer 2

TR>TC
Profit is generated

Question 3

What is normal profit

Answer 3

TR=TC
Profit is 0

Question 4

What is a loss

Answer 4

TR<TC
No profit

Question 5

Where is the profit maximisation point

Answer 5

Marginal costs=Marginal Revenue
Qmax is the quantity to sell at
Pmax is price to sell at
Draw up on curve and then look at AC curve also

Question 6

What is the long run

Answer 6

When all factors of production are variable

Question 7

What are features on Long run diagram

Answer 7

Marginal Cost(MC)
Average Cost(ATC/AC)
Average Revenue (AR)
Marginal Revenue (MR)

Question 8

What is the short run

Answer 8

when at least one factor of production is fixed

Question 9

What are features on short run diagram

Answer 9

Marginal Cost (MC)
Average Cost (ATC/AC)
Average Revenue (AR)
Marginal Revenue (MR)
Average Variable Cost (AVC)

Question 10

When is the long run shut down points

Answer 10

AR<ATC
AR=ATC

Question 11

When is the long run stay points

Answer 11

AR>ATC

Question 12

When is the short run shut down points

Answer 12

AR<AVC

Question 13

When is short run stay points

Answer 13

AR=AVC as costs of production covered
AR>AVC