ECON 202 FORMULAS
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16 Terms
What is the formula for market equilibrium?
Qd = Qs
What is the formula for consumer surplus?
= Willingness to Pay - Price
What is the formula for price elasticity of demand?
= % change in quantity demanded / % change in price
What is the formula for cross-price elasticity of demand?
Cross-Price Elasticity of Demand = % change in quantity demanded of good X / % change in price of good Y
What is the formula for income elasticity of demand?
= % change in quantity demanded / % change in income
What is the formula for profit?
= Total Revenue - Total Cost
What is the formula for total revenue?
= Price x Quantity
What is the profit-maximizing rule for a competitive firm?
MR = MC
What is the competitive firm rule in perfect competition?
P = MR = MC
What is the formula for profit area on a graph?
(Price - ATC) x Quantity
What is the formula for loss area on a graph?
Loss = (ATC - Price) x Quantity
What is the shutdown rule?
Stay open if Price >= AVC; shut down if Price < AVC
What is the formula for social surplus?
Consumer Surplus + Producer Surplus
What is the profit-maximizing rule for a monopolist?
MR = MC
How do you find monopoly profit?
= (Price - ATC) x Quantity
What is long-run competitive equilibrium?
P = MC = ATC