This document defines key microeconomic formulas including: price elasticity of demand, income elasticity, consumer and producer surplus, costs including average total cost, average variable cost, average fixed cost, and marginal cost. It also defines revenue concepts like total revenue, average revenue, marginal revenue. Other formulas include marginal product, total product, economic profit, break even point, and profit maximizing conditions.
This document defines key microeconomic formulas including: price elasticity of demand, income elasticity, consumer and producer surplus, costs including average total cost, average variable cost, average fixed cost, and marginal cost. It also defines revenue concepts like total revenue, average revenue, marginal revenue. Other formulas include marginal product, total product, economic profit, break even point, and profit maximizing conditions.
This document defines key microeconomic formulas including: price elasticity of demand, income elasticity, consumer and producer surplus, costs including average total cost, average variable cost, average fixed cost, and marginal cost. It also defines revenue concepts like total revenue, average revenue, marginal revenue. Other formulas include marginal product, total product, economic profit, break even point, and profit maximizing conditions.
This document defines key microeconomic formulas including: price elasticity of demand, income elasticity, consumer and producer surplus, costs including average total cost, average variable cost, average fixed cost, and marginal cost. It also defines revenue concepts like total revenue, average revenue, marginal revenue. Other formulas include marginal product, total product, economic profit, break even point, and profit maximizing conditions.
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MICRO FORMULAS
Price Elasticity of Demand = % change in Q.D. / % change in Price
Price Elasticity of Supply = % change in quantity supplied / % change in in price Income Elasticity = % change in demand divided by the % change in income Cross Price Elasticity = (% change in demand of product A) / (% change in price of product B) Consumer Surplus = Maximum price willing to spend – Actual price Producer Surplus = Total revenue – Total cost Average Total Cost (ATC) = Total cost / Q Average Variable Cost (AVC) = Total Variable Cost / Q Average Fixed Cost (AFC) = ATC – AVC Total Cost (TC) = (AVC + AFC) X Output (which is Q) Total Variable Cost (TVC) = AVC X Output Total Fixed Cost (TFC) = TC – TVC Marginal Cost (MC) = Change in Total Costs / Change in Output Marginal Product (MP) = Change in Total Product / Change in Variable Factor Marginal Revenue (MR) = Change in Total Revenue / Change In Q Average Product (AP) = TP / Variable Factor Total Revenue (TR) = Price X Quantity Average Revenue (AR) = TR / Output Total Product (TP) = AP X Variable Factor Economic Profit = TR – TC > 0 A Loss = TR – TC < 0 Break Even Point = AR = ATC Profit Maximizing Condition = MR = MC Revenue Maximization: MR = 0 Sales Maximization: AR = ATC Allocative Efficiency = P = MC
