TC, TVC, TFC TFC Q1 Q2 Q MC ATC AVC AFC Q.

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Presentation transcript:

TC, TVC, TFC TFC Q1 Q2 Q MC ATC AVC AFC Q

10 MC 9 ATC 8 7 AVC 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10

10 MC 9 ATC 8 7 AVC 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10

Profit Maximization: Profit = Total Revenue - Total Cost Total Revenue (TR) = P × Q Average Revenue (AR) = TR÷Q =

Marginal Revenue: It measures the change in total revenue generated by one additional unit of goods or services.

Weekly Revenue and Cost Data for a Gold Miner Price of Gold = $600 / oz

MR MC MC P P = MR q Output

Fig. A MC ATC AVC a P c b q

10 MC 9 ATC 8 7 AVC 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10

Fig. C MC ATC AVC b c P a n m q

Fig. B MC ATC AVC b c P a q

10 MC 9 ATC 8 7 AVC 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10

10 MC 9 ATC 8 7 AVC 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10

10 MC 9 ATC 8 7 AVC 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10

10 MC 9 ATC 8 7 AVC 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10