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Economics formulas (Cost of production (Marginal product= % change output…
Economics formulas
Cost of production
Marginal product= % change output ÷ % change inputs
Average product= total output ÷ number of inputs
Total costs = Total fixed costs + Total variable costs
Average total costs =
Average fixed costs + average variable costs
Marginal cost= change in total cost ÷ change in quantity
Returns to scale= %change output ÷ %change inputs
Competition
Total revenue= P x Q
Average revenue= total revenue ÷ quantity
Marginal revenue= change in total revenue ÷ change in quantity
In perfect comp AR x Q also = Total rev
Profit maximizing point= MR=MC in perfect comp
In monopolies P>MR=MC
Profit= (P-ATC) x Q
Elasticity
PED= % change demand ÷ % change price
PES= % change supply ÷ % change price
IED= % change demand ÷ % change income
Midpoint method- PED formula but P and D equals-
D= (Q2-Q1) ÷ ((Q1+Q2)÷2) x 100
P= (P2-P1) ÷ ((P1+P2)÷2) x 100
Cross PED
% change D good X ÷ % change P good Y
PPF
Opportunity cost= Gain in good X ÷ Scarifice in good Y
Govt policies
Tax revenue= sales tax x quantity traded after tax