Figure 21-18
The figure shows two indifference curves and two budget constraints for a consumer named Kevin.
-Refer to Figure 21-18. If the price of a shirt is $36 and point A is Kevin's optimum, then what is Kevin's income?
Definitions:
Normal Profits
The level of profit necessary to keep a firm in an industry, equating to the opportunity cost of capital and entrepreneurship.
Marginal Cost
The financial commitment needed for producing an extra unit of a good or service.
Marginal Revenue
The addition to total revenue resulting from the sale of one more unit of a product or service.
ATC
Average Total Cost; the total cost of production (fixed and variable costs combined) divided by the number of units produced.
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