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Exam2 - -Profit maximization condition for a competitive...

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How to study for the second exam (ch. 7, 21 9, 11, 12, 13) 1. Learn the definitions - Consumer Surplus - Producer Surplus - Tariffs - Quotas - Total revenue - Total cost - Profit - Economic profit - Accounting profit - Production function - Marginal product - Diminishing marginal product - Fixed costs - Variable costs - Average total cost - Average fixed cost - Average variable cost - Marginal cost - Efficient scale - Economies of scale - Diseconomies of scale - Competitive market - Average revenue - Marginal revenue - Shut-down point - Exit point - Profit maximization condition - Monopoly - Natural monopoly - Price Discrimination - Monopolistic Competition - Oligopoly
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2. Be prepared to answer questions about: - The effects of market restrictions (taxes, price floor, price ceiling, trade restrictions) on the equilibrium price and quantity, and on the consumer and producer surplus - The difference between the economic profit and accounting profit - The computation and the graphical representation of the different types of costs
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Unformatted text preview: -Profit maximization condition for a competitive firm-Shut-down condition for a competitive firm-Exit condition for a competitive firm-Graphical representation of the cost and revenue curves of a competitive firm-The reasons why monopolies exist-Profit maximization condition for a monopolist-Monopoly output and price elasticity of demand-The welfare cost of a monopoly-Monopolistic Competition output and price-Methods used to determine industry structure-The effects of different price strategies on consumer surplus 3. Learn the following formulas:-TC = FC + VC-ATC = TC/q-AFC = FC/q-AVC = VC/q-q TC MC ∆ ∆ =-q TR MR ∆ ∆ =-TR = P*q-L q MP L ∆ ∆ = L=labor-Profit = TR – TC = (P-ATC)*q Go over the problems at the back of each chapter and the practice questions posted on semester book. 4. Bring the following to the exam:-A small scantron-A calculator-A pencil and eraser...
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Exam2 - -Profit maximization condition for a competitive...

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