Graphs 2
Production
Short-Run
Graphs
Vocab
100
The Profit Maximizing Quantity AND Price
What is:
Quantity = 3
Price = 4
100
What is the Profit - Maximizing Point?
MR=MC
100
Define: Short Run
A period of time in which at least one resource is fixed
100
A graph showing maximum combinations of two goods or services that can be produced with limited resources.
What is PPC?
100
The cost of producing one more unit of a good is called this.
marginal cost?
200
Name the cost curves from A - C
A = Average Variable Cost
B = Average Total Cost
C = Marginal Cost
200
At what unit does Diminishing Marginal Returns set in?
3rd Worker
200
Short run marginal costs eventually increase because of the effects of...
Diminishing Marginal Products
200
The supply line is horizontally straight in this graph.
Perfectly elastic graph
200
The maximum amount a consumer is willing to pay for an additional good or service, or additional satisfaction when paying for it.
Marginal Benefit
300
What type of market is this
Perfect Competition Market
300
Define: Diminishing Marginal Returns
As you add variable resources to fixed resources, the additional output will eventually decrease
300
A profit-maximizing firm will shut down in the short run any time the firm’s total revenue is less than its:
Total Variable Cost
300
The supply line in this graph is vertically straight.
Perfectly Inelastic
300
When a producer can provide a good or service in greater quantity for the same cost, or the same quantity at a lower cost, than its competitors
Absolute Advantage
400
Draw and Identify all 3 stage of long-run average costs
1: Economies of Scale
2: Constant Returns to Scale
3: Diseconomies of Scale
400
A firm expands its fixed resources and its overall costs of production go up. It is experiencing...
Negative returns to scale
400
Assume that a profit-maximizing, perfectly competitive firm has economic losses in the short run. If the firm continues to produce and sell its goods, then which of the following must be true?
The firm is covering its variable costs but failing to cover all of its fixed costs
400
This is the middle part of the returns to scale graph.
constant returns to scale
400
This principle suggests that as you consume more of a good, the additional satisfaction decreases.
the law of diminishing marginal utility
500
500
Tony opens up a hot chocolate stand for two hours. He spends $10 for ingredients and sells $60 worth of tasty beverages. In the same two hours, he could have provided Uber services and earned $40. Tony's accounting profit is ____ and an economic profit of ____.
Accounting Profit: $50
Economic Profit: $10
500
Suppose that price in a perfectly competitive industry decreases and it is now below minimum average total cost but remains above minimum average variable cost. Which of the following will occur in the short run?
Firms will produce the output at which marginal cost equals the new price.
500
This is the left part of the returns to scale graph.
Increasing Returns to scale
500
Products/services that can only be consumed by one user or a limited number of users
Rival Goods