Economics - Marginal Analysis 2
Demand Curve
A chart or formula of the relationship between price and quantity demanded.
Derivative
Not original, secondary.
Total Cost Formula
TC = VC + FC
Total Cost
The sum of fixed and variable costs for a given quantity produced.
Total Revenue
The sum of the prices for the quantity sold. Because in most situations there is a constant market price, the total revenue is usually price times quantity.
Total Profit
The sum of the profit for the quantity sold. This is often computed as total revenue minus total cost.
Variable Cost
Costs that change with the quantity produced.
Fixed Cost
Costs that do not change with the quantity produced. You can think of this as the costs of being in business. Costs that are fixed in the short term might possibly be variable over a longer time frame in which changes can be made to reorganize how a business operates.
Polynomial
An expression consisting of the sum of two or more terms each of which is the product of a constant and a variable raised to an integral power: ax 2+ bx + c is a polynomial, where a, b, and c are constants and x is a variable.
Total Profit Formula
TP = TR - TC
Total Revenue Formula
TR = p * Q
Marginal Cost
The first derivative of total cost with respect to quantity.
Marginal Profit
The first derivative of total profit with respect to quantity. This is often computed as marginal revenue minus marginal cost.
Marginal Revenue
The first derivative of total revenue with respect to quantity. Typically, the marginal revenue is a constant, the market price of a product or service.