Surplus
QS>QD
Quality supply is greater then quality demanded
Shortage
QD>QS
Quality demanded is greater then quality supply
Equilibrium- the point in which supply and demand intersect
- At this point, resources are used efficiently
Disequilibrium- when it's not used efficiently
Price ceiling- government imposed price control on how high a price can be changed for a product or service
Price floor- a government imposed price control on how low someone can change for a product or service
Total revenue= PxQ
Marginal revenue- the additional income from selling more units of a good
Fixed cost- cost that does not change no matter how much is produced
Ex.: rent, mortgage, and insurance etc
Variable cost- a cost that fluctuates or changes ( does depend on how much is produced)
Ex.: gas, cell phone bill,etc
Marginal cost- a cost of producing one more unit of a good
New TS – old TS
Formulas
TC= TFC+TVC
AFC= TFC/Q
AVC= TVC/Q
ATC= AFC+AVC or TC/Q
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