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Microeconomics

Profit-maximizing point

The profit maximizing point for any firm is where MR = MC. This stays consistent among all firms! For example, if we were given the … Read More

Monopolies

Imagine that you live on an island, and the only way anyone on that island can get gasoline to power their cars is through you. … Read More

Competitive Firms

Imagine you run a lemonade stand in Lemonville, a town with thousands of competing lemonade stands. Each lemonade stand sells the same thing: lemonade. A … Read More

Average Total Cost

To calculate average total cost (ATC), we’ll use the following formula: ATC = TC / Quantity We have the following total costs… Output Variable Cost  … Read More

Average Variable Cost

To calculate average variable cost (AVC), we’ll use the following formula: AVC = VC / Quantity We have the following variable costs… Output Variable Cost  … Read More

Average Fixed Cost

To calculate average fixed cost (AFC), we’ll use the following formula: AFC = FC / Quantity We have the following fixed costs… Output Variable Cost  … Read More

Total cost curves

Total cost curves include VC, FC, and TC. We calculated these in the following table: Output Variable Cost  Fixed Cost  Total Cost  0 $0 $10 … Read More

Marginal Cost

Your marginal cost (MC) is the additional cost of each unit of output in relation to your total cost. Marginal cost determines the best way … Read More

Total Cost

Total costs (TC) are your fixed costs plus your variable costs. We can see that the total cost for each unit of output is simply … Read More