AP Micro formula sheet

TC

TFC + TVC

AFC

TFC/Q

AVC

TVC/Q

ATC

TC/Q

AFC + AVC

MC

∆TC / ∆Q

AR or P

TR/Q

TP

Sum of MP

TR

P x Q

MR

∆TR / ∆Q

MP

∆TP / ∆Q

AP

Total product / labor

Shut-down point

AR < AVC

Elasticity of Demand

% ∆ in QD / % ∆ in P

Fiar returns

P = ATC

Socially optimal

P = MC

Under allocation of resources

P > MC

Over allocation of resources

P < MC

Profit Maximization

MR =. MC

Hiring Rule

MRP = MRC

MRP (in a perfectly competitive factor market)

MP x P

profit

TR - TC

economic profit

P > ATC

economic loss

P < aTC

MRP

∆ TR / ∆ input

MRC

∆ TC / ∆ input

productive efficiency

P = min ATC

movment along the demand curve

∆ price

inelastic (MR)

MR < 0

elastic (MR)

MR > 0

unit elastic (MR)

MR = 0

Inelastic

PED/PES < 1

Elastic

PED/PES > !

unit elastic

PED/PES = 1

Perfectly elastic

PED/PES = ∞

Perfectly inelastic

PED/PES = 0