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Theory of the Firm (Market Structure Diagrams week 10* (average and…
Theory of the Firm
Market Structure Diagrams
week 10
*
marginal revenue curve
average revenue curve
average cost curve
smiling face curve
marginal revenue curve
marginal cost curve
curve like nike tick
average and marginal value
AR＞AC
AR＜AC
*Market Structure Characteristics
week 9
**
: : :
Oligopoly
Monopoly
Monopolistic
Competition
Pure Monopoly
Perfect
Competition
*Revenue/Profits
week 8
*
:
total revenue
the total amount received from selling each unit
average revenue
the average amount receive from selling each unit
Profit
Subnormal Profit
A level of profit which is below normal profit
Abnormal/Supernormal profit
Any profit that is made over and above normal profit
Normal Profit
The required minimum profit levels need to keep the current business of the company
marginal revenue
the amount receive from selling extra unit
Costs
week 7
marginal costs
the cost of one more or one fewer unit of production(MC= TCn - TCn-1units )
fixed & variable costs
fixed costs: costs that are not directly related to production
variable costs: costs directly related to variations in output
average costs
the cost per unit of output (AC=TC/output)
long & short run
long run: the period of time during which all factors of production can be varied
short run: the period of time during which at least one factor of production must remain fixed
total costs
the sum of all costs incurred in production (TC=FC+VC)
