AP Microeconomics Formula Sheet

Price Elasticity of Demand

Ed=(%∆QD)/(%∆P)
%∆=(new-old)/(old) x100

Price Elasticity of Demand-Midpoint Formula

Ed=(∆QD)/(sum of Q/2) ÷ (∆P)/(sum of P/2)

Total Revenue

price x quantity

Price Elasticity of Supply

(%∆QS good X)/(%∆P good X)

Price Elasticity of Supply-Midpoint Formula

Ed=(∆QS)/(sum of QS/2) ÷ (∆P)/(sum of P/2)

Cross Elasticity of Demand

XED= (%∆QD X)/(%∆P Y)

Income Elasticity of Demand

YED=(%∆QD)/(%∆income)

Utility Maximizing Rule

(MU of A)/(P) = (MU of B)/(P)

Marginal Product

∆TP/∆labor input

Average Product

TP/units of labor

Fixed Costs

TC-TVC

Variable Costs

TC-TFC

Total Costs

TFC+TVC

Average Fixed Costs

TFC/Q

Average Variable Costs

TVC/Q

Average Total Costs

AFC+AVC or TC/Q

Marginal Costs

∆TC/∆Q

PC-profit maximization in the SR

MR=MC

Productive Efficiency

P=min ATC

Allocative Efficiency

P=MC or MB=MC

Underallocation

P>MC

Overallocation

P<MC

Monopoly-profit maximization

MR=MC

Monopoly-socially optimal price

P=MC

Monopoly-fair return price

P=ATC

Monopolistic Competition-profit maximization in the SR

MR=MC

Monopolistic Competition-profit in LR

MR=MC=tangent to ATC

Oligopoly-profit maximization in the SR

MR=MC

Profit-Maximizing Rule for Resource Demand

MRP=MRC

Monopoly-socially optimal price

P=MC