Microeconomics
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15 Terms
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MC > P
Reduce output
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MC < P
Increase output
3
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MC = P
Stay
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P < AVC
Shut down
5
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P ≥ AVC
Stay open
6
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P < ATC
exit the industry
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P ≥ ATC
Stay
8
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If demand is ELASTIC
Price ↑ → Total revenue ↓
Price ↓ → Total revenue ↑
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If demand is INELASTIC
Price ↑ → Total revenue ↑
Price ↓ → Total revenue ↓
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Monopoly
Less output, higher price
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Negative externality
market overproduces
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Positive externality
market quantity too low
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Quantity demanded > Quantity supplied
Shortage
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Price ceiling (below equilibrium)
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Price floor (above equilibrium)
surplus
Note 
Flashcards (70)