Topic 03 Firms Flashcards
1
Q
cost function
A
rK+wL
FC+VC
2
Q
short run cost function
A
r+wq^2
3
Q
AC
A
C(q)/q
4
Q
AFC
A
FC/q
5
Q
AVC
A
VC(q)/q
6
Q
MC
A
change in C(q)/change in q
7
Q
profit max sr
A
pq-C(q)
(p-AC(q))q per unit profit x units
(p-AVC(q))q-FC operating profit
8
Q
profit max quantity on a diagram
A
P=MC
MR=MC
9
Q
shut down price
A
operating profit can’t cover FC
