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Understanding Costs of Production and Perfect Competition in Economics

This comprehensive guide covers key concepts in production costs and perfect competition, including total revenue (TR), total cost (TC), and profit/loss calculations. Explore explicit vs. implicit costs, the law of diminishing marginal returns, and the characteristics of perfect competition. You’ll learn to graph total product (TP), marginal product (MP), and average product (AP), alongside fixed and variable costs. Additionally, understand the importance of the shutdown price and the short-run supply curve. Essential for economics students seeking clarity in these fundamental topics.

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Understanding Costs of Production and Perfect Competition in Economics

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  1. What is TR? $300 What is TC? $250 Profit/Loss per unit? $5 How much is the profit or loss? $50 Where is the Shutdown Price? $22 $35 30 25 20 0 MC MR=D ATC Cost and Revenue AVC 22 1 2 3 4 5 6 7 8 9 10 1

  2. Unit 3: The Costs of Production and Perfect CompetitionREVIEW ACTIVITY 2

  3. Memorizing vs. Learning 123571113171923

  4. Review Circles Odd numbers Even Numbers

  5. Explicit & Implicit Costs and Accounting & Economic Profit

  6. 2. Calculating MP and AP.

  7. 3. The Law of Diminishing Marginal Returns and the causes of the 3 Stages

  8. 4. Graphing TP, MP, and AP and 3 Stages of Returns 10

  9. 5. Examples of Fixed and Variable Costs and the difference between short-run and long-run. 11

  10. 6. Calculating ATC, AVC, AFC, and MC 12

  11. 7. Graphing ATC, AVC, AFC, and MC 13

  12. 8. Shifting Costs Curves (Changing Variable and Fixed Costs) 14

  13. 9. Why is MC “U” Shaped? (Nike swoosh) 15

  14. 10. Explain Long-Run and Economies and Diseconomies of Scale 16

  15. 11. Graphing Long-Run Average Cost Curves (Economies and Diseconomies of Scale) 17

  16. 12. Characteristics of Perfect Competition with examples of each 18

  17. 13. Explain Industry, Firm, Price Taker, TR, MR, Economic Profit/Loss, and Profit Max./Loss Min. Rule 19

  18. 14. Calculating TR, TC, and profit/loss from a firm graph 20

  19. 15. Explain/draw shut down point and how MC above AVC is the short-run supply curve 21

  20. 16.Draw a firm making profit in the short run 22

  21. 17. Draw a firm making a loss in the short run 23

  22. 18. Draw firm and industry going from short-run profits to long-run equilibrium 24

  23. 19. Draw firm and industry going from short-run losses to long-run equilibrium 25

  24. 20. Explain Productive and Allocative Efficiency 26

  25. 21. Draw a firm making a $40 profit selling 20 units at a price of $14.

  26. 22. Draw a firm making a $60 loss selling 10 units at a price of $35.

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