Formulas

Short name Full name Formula

𝑇𝑅 Total Revenue 𝑇𝑅 = 𝑃 ∗ 𝑄
𝑇𝐶 = 𝐹𝐶 − (𝑉𝐶)𝑄,
𝑇𝐶 Total Cost 𝑤ℎ𝑒𝑟𝑒 𝐹𝐶 − 𝑓𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡𝑠
𝑉𝐶 − 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡𝑠
𝜋 Profit 𝜋 = 𝑇𝑅 − 𝑇𝐶
𝑇𝐶
𝐴𝐶 Average Cost 𝐴𝐶 =
𝑄
𝑑𝑄
𝑀𝑃𝐿 Marginal Product of Labor 𝑀𝑃𝐿 =
𝑑𝐿
𝑄
𝐴𝑃𝐿 Average Product of Labor 𝐴𝑃𝐿 =
𝑃
𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝑄
1. 𝐸 = 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝑃 (approx.)
∆𝑄 𝑃
𝐸 Elasticity 2. 𝐸 = ∗ (P and Q – average values)
∆𝑃 𝑄
𝑑𝑄 𝑃
3. 𝐸 = ∗
𝑑𝑃 𝑄
(Point Elasticity)
𝑑𝑇𝑅
𝑀𝑅 Marginal Revenue 𝑀𝑅 =
𝑑𝑄
𝑇𝑅
𝐴𝑅 Average Revenue 𝐴𝑅 =
𝑄
𝐶 Consumption
𝑑𝐶
𝑀𝑃𝐶 Marginal propensity to consume 𝑀𝑃𝐶 =
𝑑𝑌
𝑄0
𝐶𝑆 Consumer surplus 𝐶𝑆 = ∫ 𝑓(𝑄)𝑑𝑄 − 𝑄0 ∗ 𝑃0
0