BS Calculus

Cost Function

Combines variable cost and fixed cost.

What the company PAYS for.

Revenue Function

What the company gets back by consumers.

Profit Function

Revenue - Cost

Break Even Point

Profit Function = 0

Revenue = Cost

Marginal Cost

Variable Cost times 1

Marginal Revenue

Variable revenue times 1

Marginal Profit

Marginal revenue - marginal cost

Supply Curve

Quantity of the item the manufacturers are willing to make.

Increases.

When the price increases, the manufacturers are willing to make more

Demand Curve

Quantity of an item demanded by consumers.

Decreases.

When the price is higher, the customers are less willing to buy.

How to find the smallest quantity to turn a profit:

Set profit equation >

F(x) is increasing

ROC is positive

F(x) is decreasing

ROC is negative

Concave up

ROC is increasing

Concave down

ROC is decreasing

Inflection Point

Where the graph changes concavity (from concave down to concave up, vice versa)