CS 10 Pdcr Surp Notes2

# CS 10 Pdcr Surp Notes2 - 3 MPS for all units pdcd and...

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CLASS SUPPLEMENT # 10 (Page 1 of 2) PRODUCER SURPLUS NOTES MARGINAL REVENUE (MR): Increment in TR from sale of one additional unit. (If P is same for all units, MR = P) MARGINAL COST (MC): The minimum pdcr must rec'v to produce the Xth unit. (Height of MC (Sup) curve at unit X) MARGINAL PDCR SURP on Unit X (MPS X ) = MR X - MC X (Distance between MC and MR at unit X) TOTAL REVENUE (TR) = 3 MR for all units sold. (TR = P X Q if P is same for all units) (Area under price line to quantity sold) TOTAL COST (TC) = 3 MC of all units produced. (Area under MC (Supply) curve to quantity produced) TOTAL PDCR SURPLUS (TPS) =

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Unformatted text preview: 3 MPS for all units pdcd and sold. (Area between MC (Sup) curve and P to Q. Assume Price = P: MR X = _______ MC X = _______ MPS X = ______ TR x = ______ TR Z = _____ TC x = ______ TC Z = _____ TPS x = _____ TPS Z = _____ CS # 10 (Page 2 of 2) If P = 8 and Q = 2: MR 2 = __________ MC 2 = __________ MPS 2 = _________ Assume P = 8 Will unit 4 be produced? Will unit 5 be produced? Equilibrium Q = _____ TR = $___________ TC =$___________ TPS = \$__________ TPS is maximized at Q = ________________ Or more generally where: D:\ECON202\CS\CS 10 Pdcr Surp Notes.wpd...
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CS 10 Pdcr Surp Notes2 - 3 MPS for all units pdcd and...

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