econ formulas 9 + 10

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7 Terms

1
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standard demand formula

Q = a - bP

2
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MR for inverse demand

If P = a − bQ, then MR = a − 2bQ

3
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perfect price discrimination

p = mc

4
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Lerner Index (Markup)

−1 / E

5
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Producer Surplus

½ (1st difference + 2nd difference ) * Q

6
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Consumer Surplus

½ * b * h (b = quantity sold, h = highest a customer would pay)

7
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Solving a Monopoly Problem Using Equations

Find MR, set MR = MC, solve for Q, then use inverse demand to find P