formula

• What does AFC stand for in microeconomics?

  Average Fixed Cost
• How is Average Fixed Cost (AFC) calculated?

  AFC = FC / Q
• What does ATC represent?

  Average Total Cost
• What is the formula for Average Total Cost (ATC)?

  ATC = TC / Q, or ATC = AFC + AVC
• What does AVC stand for?

  Average Variable Cost
• How is Average Variable Cost (AVC) calculated?

  AVC = VC / Q
• What is Fixed Cost (FC)?

  Costs that do not change with the quantity produced (Q)

  
• What is Marginal Cost (MC)?

  MC is the increase in Total Cost (TC) that arises from producing an extra unit of output
• When does Marginal Cost (MC) cross Average Total Cost (ATC)?

  MC crosses ATC at its minimum point
• What is Total Cost (TC)?

  TC is the sum of Fixed Cost (FC) and Variable Cost (VC)
• What does Variable Cost (VC) refer to?

  Costs that change with the quantity produced (Q)
• What does the symbol Π represent in microeconomics?

  Profit
• How is profit (Π) calculated?

  Π = TR - TC
• What does a change in profit indicate?

  Change in profit is calculated as MR - MC, and profit is maximized when it equals 0

  
• What is the formula for profit in terms of average revenue and average total cost?

  π = (AR - ATC) * Q

  
• What does AR stand for?

  Average Revenue
• How is Average Revenue (AR) calculated?

  AR = TR / Q
• What does MR represent?

  Marginal Revenue
• How is Marginal Revenue (MR) calculated?

  MR = dTR / dQ
• What does TR stand for?

  Total Revenue
• How is Total Revenue (TR) calculated?

  TR = P * Q
• What are the four market forms in microeconomics?

  1. Monopoly: One firm, price setter, barriers to entry
  2. Oligopoly: Few firms, homogeneous or heterogeneous goods, more price setting
  3. Monopolistic Competition: Many firms, heterogeneous goods, free entry and exit
  4. Perfect Competition: Many firms, homogeneous goods, price takers, free entry and exit

  
• What is elasticity in microeconomics?

  Elasticity measures how sensitive one variable (Q) is to changes in another variable (P)
• What factors affect the price elasticity of demand?

  The number of substitutes available and whether the product is a luxury or a necessity

  
• How is price elasticity of demand calculated using the midpoint method?

  Price elasticity of demand = (% change in quantity / % change in price)

  
• What is the price elasticity of demand for airline tickets for business travelers when the price increases from €200 to €250?

  0.23
• What is the equilibrium price for cinema tickets when there are 1000 seats available?

  €15
• What is the equilibrium price for opera tickets when there are 80 seats available?

  €92
• What is the price elasticity of demand for cinema tickets at the equilibrium price?

  • 0.6
• What is the price elasticity of demand for opera tickets at the equilibrium price?

  • 11.5
• What is the quantity demanded for cinema tickets after a price increase of €3?

  880 seats
• What is the quantity demanded for opera tickets after a price increase of €3?

  50 seats
• What is the price elasticity of demand for cinema tickets after the price increase?

  • 0.82
• What is the price elasticity of demand for opera tickets after the price increase?

  • 19
• Who suffers more from the price increase of tickets, the cinema or the opera?

  The opera suffers more due to its price-elastic demand
• What is a shortage in market terms?

  A shortage occurs when quantity demanded exceeds quantity supplied at the market price
• What is a surplus in market terms?

  A surplus occurs when quantity supplied exceeds quantity demanded at the market price
• What is the Income Elasticity of Demand?

  It measures how quantity demanded changes as consumer income changes

  
• What characterizes normal goods in terms of income elasticity?

  Normal goods have an elasticity greater than or equal to 0
• What characterizes inferior goods in terms of income elasticity?

  Inferior goods have an elasticity less than 0