ECON 2201 Final 2

Total Revenue

P x Q=

Marginal Revenue

∆TR/∆Q=

Average Total Cost

TC/Q=

Marginal Cost

∆TC/∆Q=

Max π

Q(P-ATC)=

Perfectly competitive Demand

Monopolistic Competition Demand

Monopoly Demand

Marginal Utility

∆Tu/∆Q=

Utility per dollar

MU/P=

Utility is maximized

MUx/Px=MUy/Py

Accounting profit

TR- Explicit costs=

Economic Profit

TR-(Explicit costs + Implicit costs)=

Total Cost

Fixed Costs + Variable Costs=

Average variable costs

VC/Q=

(Perfectly Competitive Firm)

Positive economic profit π > 0

(Perfectly Competitive Firm)

Negative economic profit π < 0

(Perfectly Competitive Firm)

Zero economic profit π = 0

Profits on the Long-run perfect competition

Natural Monopoly (Economies of Scale)

Monopolistic Competition

(Long run profits)

Positive economic profits π > 0

(Long run profits)

Negative economic profits π < 0

Profit Maximising Monopoly

Private Monopoly

(Short Run)

Positive economic profits π > 0

(Short Run)

Negative economic profits π < 0

(Short Run)

Zero economic profits π = 0

(Long Run)

Positive economic profits π > 0

(Long Run)

Negative economic profits π < 0

Negative Externality

Positive Externality