Wednesday, 6 April 2011

microeconomics - 162

assalamualaikum ! :)



hello all ! it's been awhile since i left my blog *kesian dia . why ? i've been busy studying microeconomics ! *Grr!! even though it's a last minute study , harap2 boleh score lah . hehe . okey ,. syllabus are based on the above book . gerun kannn ?

in this book there's 2 parts . 

(i) microeconomics 
(ii) macroeconomics  

btw , i bukan baca sgt pun buku tu . based on manual je . buku itu sekadar hiasan di bilik or just jadi pelapik laptop . *kuangkuangkuanggg ....

topics that are tested in test are :

(i) theory of production
(ii) cost of production
(iii) market structure :
      perfect competition , monopoly , monopolistic competition

haaa ,. looks simple right ? NOPE. not really . because we have lotsa theories , graphs , formulas  to remember . 

fyi ,. i've problems on remembering something (short-term memory loss) and solution is ,. drink Chicken Brands !





okay , i'll give you an example on Short-Run Monopolistic Competition .




so ,. what do y'all understand about this graph ? okay , how do y'all differentiate between this graph and a Monopoly graph ?

- we look at the D . in monopolistic competition , D is elastic (less steep) compared to monopoly's D which is inelastic (more steeper). 

okay , let's continue on the Monopolistic Competition .

when MR = MC (MC intersects with MR) profit is maximized . also known as equilibrium point .

to determine whether it is earning supernormal , normal or subnormal profit , we look at the ATC (which sometimes known as AC) curve . as we see in the graph , ATC is located above D . therefore , it is earning supernormal profit *which is good .

okay . done with that ,. how to calculate the profit earned?

BIG box (shaded area and non-shaded area) is Total Revenue , TR .
SMALL box ( only non-shaded area ) is Total Cost , TC .

TR - TC = Profit (shaded area)

terms ,...
D = demand curve
MR = Marginal Revenue curve
MC = Marginal Cost curve
ATC = Average Total Cost curve
AC = Average Cost curve
TR = Total Revenue
TC = Total Revenue


and there you go ,. end of today's lesson . BEST kan ? :P

THE END



- mumu -


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