Objectives and costs → output and price decisions → market structure → efficiency and policy; apply MRP to labour.
Firms and objectives
Connect ownership and growth to the firm’s objective and constraints. 1 · 2 · 3
Revenue costs and profit
Use consistent cost and revenue relationships to locate the chosen output. 4 · 5 · 6 · 7
Efficiency and structures
Compare price, output, cost, market power and entry conditions. 8 · 9 · 10 · 11 · 12 · 13 · 14
Labour markets
Trace labour demand to MRP; distinguish competition, monopsony and barriers. 15 · 16 · 17 · 18
Intervention
Assess the policy against the particular product or labour-market failure. 19 · 20
Essential formulas and conditions
TR = P × Q; AR = TR / Q; MR = ΔTR / ΔQ.
TC = TFC + TVC; AC = TC / Q; MC = ΔTC / ΔQ.
Profit = (P − AC) × Q; profit maximum: MR = MC at the appropriate crossing.
Revenue maximum: MR = 0; sales maximum with break-even constraint: AR = AC.
MRP = MPP × MR; for a product-market price taker, MR = P.
Key diagrams
Objectives p. 16 | Cost curves p. 25 | Firm decision p. 35 | Price discrimination p. 61 | Monopsony p. 64
Read a diagram: identify the cause → trace the change → read the result → state the condition that could change it.
Notation: AC = ATC; MC = marginal cost; AR = average revenue; MR = marginal revenue. ALC = average labour cost and MLC = marginal labour cost; MC in a labour diagram means MLC.
Revision route: formula index p. 101 · diagram index p. 103 · key distinctions p. 104