Unit 1, Subject 3 AP ECO

total revenue: price x quantity

fixed cost: cost that does not change no matter how much of a good is being produced
            ex- salary, not paid by input/hour, mortgage, insurance

variable cost: a cost that rises or falls depending upon how much is produced
            ex- electricity bill based on usage

marginal cost: the cost of producing one more unit of a good
             ex- extra shipment of fanshirts when               people want more, an additional cost for going back to make second supply

difference between cost revenue: cost is whats spent (paid), revenue is income (receiving). out vs in

Price ceiling: "buyers"
- legal maximum price meant to help buyers
- ex: rent costs
- 4 consequences when price ceilings are set too low: lower prices for some consumers, shortage/ or shortages, long lines for some buyers, and illegal sales above ther equilibrium price.

Price ceiling will be below equilibrium

Price floor: "sellers"
- legal minimum price meant to help sellers.
4 consequences: higher product prices, surplus, higher taxes, and waste.

EQ= equilibrium
PL= price floor