AP Microeconomics: Graphs!

Production Possibilities; right shift indicates economic growth

market equilibrium

consumer surplus

producer surplus

price floor; causes a surplus

price ceiling; causes a shortage

perfect competition at equilibrium

perfect competition making a profit

perfect competition making a loss

perfect competition in a "shut down" position

monopoly making a profit

monopoly making a loss

monopolistic competition at equilibrium

supply and demand for labor

perfectly competitive demand for labor

monopsonistic competition for labor

a negative externality causes too many to be produced at too low a price

a positive externality causes too few to be produced at too low a price

the lorenz curve; measures income inequality

Tax Curve

show:

1a Producer tax burden
1b consumer tax burden
2.Deadweight loss
3.Consumer Surplus
4.Producer Surplus

•Price of tax = P1-P2
•P1=Price consumers pay
•P2=Price producers receive

•Qt= Quantity produced and demanded

International Tariff:

•Pw+Tariff is the price
•Q2 domestically produced
•Q3 domestically consumed
•Q3-Q2 is imported
•Consumer Surplus ABEF
•Producer Surplus CD
•Tax Revenue HI
•Deadweight loss GJ

Cost Curve

Show BOTH market and Firm graph of perfect competition w economic loss

​Monopoly Long-run profit

1.The monopoly price and quantity Pu and Qu when if it is unregulated.
2.The allocatively efficient price and quantity. A government price ceiling here would cause the firm to incur a loss.
3. Fair return price. A price ceiling here would still be inefficient, but there would be less deadweight loss and the firm would break even so it would continue to operate in the long run.

1.Productive efficient point
(Minimum of ATC)
2.Allocative efficient point
(MC=P) quantity below
3.Actual output (MR=MC) and price (DARP above MR=MC at point 4)
5.Unit elastic portion of the demand curve (where MR equals zero at that quantity). Demand is inelastic below and elastic above this point.

perfectly competitive market (supply decreases) (BOTH market and firm)

Monopsony Factor Market

Lorenze Curve

Negative Externalities with Per-Unit Excise Tax Correction on Producer

Positive Externalities with Per-Unit Consumer Subsidy Correction

Natural Monopoly (show unregulated, socially optimal, fair return)

socially optimal is when MC=P

Price discriminated monopoly (show where’s profit)