Supply Flashcards
Law of supply
P up QD up P down QD down
Examples of fixed cost
Rent/mortgage, fire insurance, salaries
Examples of variable cost
Raw materials, hourly wage, utilities, bonuses
Which variable cost is the most variable for suppliers
Labor
Calculate total  Cost
FC + VC
Calculate marginal cost
TC this row minus TC last row
Calculate average total cost
TC divided by Q
Calculate the total revenue
Q times MR
Calculate profit
TR minus TC
Formula for profit maximizing quantity of output
MC equals MR
Break even point
No losses and no profits
Black
Making profit
Red
Losing profit
Short run
Some costs are fixed and some are variable
Long run
All costs are variable
Subsidy
When government gives you a good or service or cash
Marginal product
Dividing the change in output by the change in labor used
Seven factors of shift supply homes (seven determinants of supply)
Change in cost of outputs
Change in worker productivity
Change in technology
Change in tax or subsidy
Change in producer price expectation
Changing government regulation
Change in number of sellers
Study elastic it inelastic curse
Very inelastic supply - Huge change in price results in tiny change in quantity supply
Perfectly inelastic supply- Large change in price results in no change in quantity supply
Unit elastic supply- change in price results in equal change in quantity supply
Very elastic supply-Tiny change in price results in huge change in quantity supply
