Equilibrium

Equilibrium is a point where the supply and demand curves intercept. "All resources are being used efficiently"

• Shortage-  QD > QS     Quantity Demanded > Quantity Supply
• Surplus- QS > QD     Quantity Supply < Quantity Demanded

Terms :

• Price Floor- a government imposed price limit on how low a price can be changed for a product 

• Price Ceiling- a government imposed limit on how high a price can be charged for a product.

• Fixed Cost- a cost that does not change no matter how many are produced.

• Variable cost- a cost that changes.

• Marginal Cost- a cost of producing one more unit of goods.

• Marginal Revenue- the additional income from selling one more until of a good.

Formulas: 

• Total Cost: Total Fixed Cost + Total Variable Cost  &  Average Total Cost / Quantity
• Average Fixed Cost: Total Fixed Cost / Quantity 
• Average Variable Cost: Total Variable Cost / Quantity
• Average Total Cost: Average Fixed Cost + Average Variable Cost  &  Average Variable Cost
• Marginal Cost: New Total Cost - Old Total Cost 
• Total Revenue: Price x Quantity