Microeconomics All cost formulas
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Break Even Point
= AR = ATC
Total Cost (TC)
= (AVC + AFC) X Output (Which is Q)
Average Fixed Cost (AFC)
= ATC - AVC
Total Variable Cost (TVC)
= AVC X Output
Marginal Product (MP)
= Change in Total Product / Change in QLabor
Profit Maximizing Condition
= MR = MC
Average Total Cost (ATC)
= Total Cost / Q
Average Variable Cost (AVC)
= Total Variable Cost / Q
Total Product (TP)
AP X QLabor
P=MC
Allocative efficiency
Marginal Cost (MC)=
Change in Total Costs / Change in Output
Marginal Revenue (MR)
Change in Total Revenue / Change in Q
Shut down point
P (price) = AVC (average variable cost).
Total Revenue (TR)
Price X Quantity
Total Fixed Cost (TFC) =
TC - TVC
Average Product (AP)
TP / QLabor
A Loss
TR - TC < 0
Economic Profit
TR - TC > 0
Explicit Costs
up front cost
