econ final review

What’s the minimum __

take the derivative

What is the long-run price?

P = min ATC1

What is total revenue?

P * Q

How do you find optimal level of output?

set Qd = Qs, solve for Q where P = MC

What is profit?

P * Q - TC(Q)

How to find #firms

Qs/firm output

How to find #firms exit/enter the market

Qs/firm output, subtract from OG

What is the firms' shutdown price?

MC = minAVC

How tp find Profit-maximizing price and output (non competitive)

find MC, find MR, set MR = MC, then solve for Q and P

What is normal profit price?

P = min ATC

At what price is demand unit elastic

Ed = 1

When is revenue maximized?

MR = 0

Consider the following function relating number of units (in 100) of a product sold, N, to the amount (in $10000) spend on advertising, AD.

N= -0.08 AD3+3.6 AD2-30 AD+80

b) What level of advertising generates the maximum number of units sold.?

take deriv of N, set = 0, take the 2nd deriv and plug in values

b) Find the function's point of diminishing return. 

set the 2nd deriv = 0

in a competitive market, profit is maaxed when

P = MC

in a monopoly, profit is maxed when

MR = MC

monthly growth rate

g = a - 1

Determine various supply elasticities (multiply prices)

coeff * value/total

MES is where AC is minimized

MC = AC

output elasticity of cost

MC * Q / TC

When is a production function valid?

the output is non negative

in the long run

P = min ATC2

For a competitive firm with only labor as variable input:

MC = w / MPL

how to find elasticities (one price)

deriv * value/total