Reference Page exam 2

Reference Page exam 2 - Price Increase Decreases the...

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Reference Page Total Cost = Fixed Cost + Variable Cost Average Fixed Cost = Fixed Cost/ Quantity of Output Average Variable Cost = Variable Cost/ Quantity of Output Average Total Cost = Total Cost/ Quantity of Output Marginal Cost= Total Cost/ Quantity Marginal Utility per Dollar = Marginal Utility/ Price Profit = Total revenue – Total Cost Average Revenue = Total revenue/Quantity of the product sold Marginal Revenue = Total Revenue/ Quantity Total Revenue = Price X Quantity Income Effect Income Effect Substitution Effect Price Decrease Increases the consumer’s purchasing power, which… …if a normal good, causes the quantity demanded to increase. …if an inferior good, causes the quantity demanded to decrease. Lowers the opportunity cost of consuming the good, which causes the quantity of the good demanded to increase.
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Unformatted text preview: Price Increase Decreases the consumers purchasing power, which if a normal good, causes the quantity demanded to decrease. if an inferior good, causes the quantity demanded to increase. Raises the opportunity cost of consuming the good, which causes the quantity of the good demanded to decrease. Characteristic Perfect Competition Monopolistic Competition Oligopoly Monopoly Number of Firms Many Many Few One Type of Product Identical Differentiated Identical or Differentiated Unique Ease of Entry High High Low Entry Blocked Examples of Industry-Wheat-Apples-Selling DVDs-Restarants-Manufacturing computers-Manufacturing automobiles-First Class Mail Delivery-Tap Water P > ATC, the firm makes a profit P = ATC, the firm breaks even (cost = revenue) P < ATC, the firm experiences losses...
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Reference Page exam 2 - Price Increase Decreases the...

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