Smokin’Notes ECO2023 Index Card Template
TC = FC +VC
. ATC = TC / Q
AFC = FC/Q.
AVC = VC/Q.
ATC = AFC
TC = ATC*Q
MC = ∆TC/∆Q
MR = ∆TR/∆Q
PED = % change in
quantity demanded/% change in price.
Dividend Yield = dividend/ price.
Utility is when MU/P = MU/P.
ECO PROFIT = TR-TC.
one owner, simple to start, profits taxed once, unlimited
2 or more owners, simple to start but a bit more
complicated than proprietorship, profits taxed once, unlimited liability.
many owners called shareholders, who own stock, capital is
easy to obtain, difficult and costly to form, profits taxed twice, limited liability.
debt, must pay interest, finite life. Loans made to company and have
no ownership of company.
ownership, might pay dividends, infinite
life. You can gain through dividends or capital gains.
time during which at least one of the firm’s inputs cannot be changed.
period of time during which all inputs can be varied. A
can be changed and a
cannot be changed. IN
labor is variable,
capital is fixed. In
labor is variable and capital is variable.
not change. Include rent, facilities, large machinery.
changes. As output increases, variable costs increase.
increases, total costs increase because variable costs increase.
increases, AFC decreases.
as output increases, AVC decreases at first,
reaches its minimum, then rises.
as output increases, ATC initially
decreases, but eventually begins to rise again.
Vertical distance between