Ap Microeconomics Unit 3

profit

TR-TC

shareholders

firms try to serve

sole proprietorship

total liability, but you get all the profits

partnership

shared liability and shared profits

corporations

shareholders, dividends paid to shareholders from profits, limited liability to shareholders, based on capital first used to pay for corporation.

stocks

issuing ownership in a company

bonds

issuing debt for a company

normal profits

the best a firm can be doing at that point. economic profit good enough to keep the firm engaged in its current activity

TC

VC+FC

AFC

FC/Q

AVC

VC/Q

ATC

TC/Q

MC

delta TC/ delta Q

Allocative efficient

p=MC, MC=MB

Productively efficient

P= Average Total Cost