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2 market models, Total Revenue- Total Cost Approach - Coggle Diagram

- - - - Graph Explanation
        Produce where MC=MR
        P>A
        Green Block = Economic Profit
    - - Graph Explanation
        Produce where MC=MR
        P<A
        Red Block= Loss
  - - - Graph Explanation
        Firms will stay or leave based on profit.
        Only a normal profit will be obtained
        Break Even
        P=A
  - - - Graph Explanation in the long run neither Productive or Allocatice efficiency is achieved
        A3 Exceeds A4
        Allocative efficiency not met because P>MC
        Underallocation of resources and excess product capacity
        Excess Capacity = Difference between Q3 and Q4
- - - - Profit Maximising Case Graph Explanation
        Every Unit until the ninth unit MR>MC.
        Economic profit at ninth unit
        Total Revenue - Total Cost
        EASY wat to calculate economic profit is (Price - Average Total Cost) x Quantity
        Price = MR
    - - Loss Minimiing Graph Explanation
        Units 2 to 6 Price > MC
        Beyond 6 units MC>MR
        No Profitable production
        Price is < Total Fixed Costs but > Average Variable cost so shutdown isn't needed
    - - Shotdown Case Graph Explanation
        Price is < Average Variable Cost so losses are to great to keep producing