Formulas for Economics

Formulas for Economics plays an important role in all the students educational period. However, one of the significant responsibilities in economics is the assessment of options to decide which valid contents are given purposes or intentions. In order to do this, it is usually beneficial to ascertain reason and influence associations and to quantify variables. Economics is a strong device that supports both of these tasks. It is difficult to perform economic analysis without some rudimentary knowledge of fundamentals.

Also Check: Accounting Formulas for Commerce Students

Economics is an accurate language that is helpful in articulating causal associations between associated variables. When decisions are taken about the distribution of resources, it is beneficial to be able to articulate how a difference in one input will modify the result and conclusively change the utility of individuals.

Important Economics Formulas
\(Average\, Total\, Cost\, (ATC)\, =\, \frac{Total\, Cost}{Q}\)
\(Average\, Variable\, Cost\, (AVC)\, =\, \frac{Total\, Variable\, Cost}{Average}\)
Fixed Cost (AFC) = ATC – AVC
\(Total \, Cost \, (TC) =\, \left (AVC + AFC\right ) \times Output\)
\(Total\, Variable\, Cost \, (TVC) = AVC \times Output\)
Total Fixed Cost (TFC) = TC – TVC
\(Marginal\, Cost (MC) = \frac{Change\, in \, Total \, Costs}{Change\, in \, Output}\)
\(Marginal\, Product \, (MP) = \frac{Change\, in\, Total \, Product}{Change\, in\, Variable\, Factor}\)
\(Marginal\, Revenue \, (MR) = \frac{Change\, in\, Total \, Revenue}{Change\, in \, Q}\)
\(Average \, Product \, (AP) =\frac{TP}{Variable\, Factor}\)
\(Total\, Revenue\, (TR) = Price \times Quantity\)
\(Average\, Revenue\, (AR) = \frac{TR}{Output}\)
\(Total\, Product (TP) = AP \times Variable\, Factor\)
Economic Profit = TR – TC > 0
A Loss = TR – TC < 0
Break Even Point = AR = ATC
Profit Maximizing Condition = MR = MC
Explicit Costs = Payments to non-owners of the firm for the resources they supply

The above mentioned is the concept, that is elucidated in detail about ‘Formulas for Economics’ for the Commerce students. To know more, stay tuned to BYJU’S.

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