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Economics - Example Papers

Economics

A price taker is a firm that cannot influence the price of a good or service.

Each firm's output is a perfect substitute for the output of the other firms, so the demand for each firm's output is perfectly elastic.

A firm's total revenue equals price, P, multiplied by quantity sold, Q.

A firm's marginal revenue is the change in total revenue that results from a one-unit increase in the quantity sold.

A perfectly competitive firm chooses the output that maximizes its economic profit.

Profit is the difference between total revenue and total cost.

economic profit = TR - TC

If MR > MC, economic profit increases if output increases.

If MR < MC, economic profit decreases ...

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and quantity at which it is indifferent between producing and shutting down, This point is where AVC is at its minimum

Also this is where the MC crosses the AVC curve. The firms incurs a loss equal to TFC regardless of ...

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Economics. (2014, June 8). Retrieved April 28, 2024, from http://www.essayworld.com/essays/Economics/104187

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"Economics." Essayworld.com. June 8, 2014. Accessed April 28, 2024. http://www.essayworld.com/essays/Economics/104187.

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PAPER DETAILS

Added: 6/8/2014 02:32:08 PM
Submitted By: Cookz90
Category: Economics
Type: Free Paper
Words: 242
Pages: 1

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