•Equilibrium: Supply & demand intersect. It means they are using their resources efficiency.
•Shortage: QD>QS
•Surplus: QS>QD
•Price ceiling: (below equilibrium) Gov imposed limit on how high you can be charge for a product of servant.
•Price floor: Government imposed minimum,On how low a price can be charge for a product or servant.
ex. Minim wage
•Fix cost: A cost that does not change no matter how much is produces.
Ex.rent, car insurance
•Variable cost: A cost that does changes.
Ex. Gas, water bill
•Marginal cost: New total cost-old TC
•Total Cost: TFC+TVC=TC
•Equations
-AVERAGE FIXED COST= TFC/quantity
-Average variable cost= total variable cost/Q
-Average total cost= AFC+AVC or ATC/Q
Its interesting how the government decides how low and high a person can sell their product. Its makes sure you dont buy grape juice for 100 bucks.
ReplyDeleteI like how you include the equations and highlight it so it would be easier to find, but it would also be great if you include the equation for total revenue which is price xquantity.
ReplyDeleteIt would have helped if you added a visual representation of price floors and ceilings because although you defined them people would still need to know where they are located on graphs. The rest of the notes were organized well and provided great examples.
ReplyDelete