unit 3 micro equasions

Average Product ($AP$)

$$\frac{\text{Total Product (TP)}}{\text{Labor (L)}}$$

Marginal Pro duct ($MP$)

$$\frac{\Delta TP}{\Delta\text{Labor}}\frac{\text{Change in Total Product}}{\text{Change in Quantity of Input}}$$

Total Cost ($TC$)

$TFC+TVC$ (or $ATC\times Q$ )

Total Fixed Cost ($TFC$)

$TC-TVC$ (or $AFC\times Q$ )

Total Variable Cost ($TVC$)

$TC-TFC$ (or $AVC\times Q$ )

Average Fixed Cost ($AFC$)

$$\frac{TFC}{Q}$$

Average Variable Cost ($AVC$)

$$\frac{TVC}{Q}$$

Average Total Cost ($ATC$)

$$\frac{TC}{Q}=AFC+AVC$$

Marginal Cost ($MC$)

$$\frac{\Delta TC}{\Delta Q}=\frac{\Delta TVC}{\Delta Q}$$

Total Revenue ($TR$)

$$P\times Q$$

Average Revenue ($AR$)

$$\frac{TR}{Q}=P$$

Marginal Revenue ($MR$)

$$\frac{\Delta TR}{\Delta Q}$$

Perfect Competition Revenue Relationship

$$P=AR=MR$$

Economic Profit ($\pi$)

$\text{Profit} = TR - TC$ (or $\text{Profit} = (P - ATC) \times Q$)

Profit-Maximizing Rule (All Markets)

$$MR = MC$$

Perfect Competition Profit Rule

$$P = MR = MC$$

Short-Run Shutdown Rule

Produce if $P \ge AVC$ (Shut down immediately if $P < AVC$)

Long-Run Break-Even Point

$P = ATC$ (Economic profit is zero)