How to Calculate Average Total Cost

How to Calculate Average Total Cost

Average total cost (i.e. ATC) is defined as the sum of all production costs divided by the quantity of output produced. That is, it measures how much a firm has to spend on each unit of output it produces. This concept is extremely important to understand how firms set prices and […]

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The Four Types of Economic Utiltiy

The Four Types of Economic Utility

In the field of behavioral economics, we often come across the term utility (see also key insights from behavioral economics). In this context, utility refers to the perceived value (i.e., usefulness) an individual receives when they purchase a good or service. There are four different types of utility: form utility, […]

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How to calculate a linear supply function

How to Calculate a Linear Supply Function

Supply and demand functions play a crucial role in economics. They help us analyze and understand the most fundamental economic concepts and issues (e.g., the law of supply and demand, calculating producer surplus). For the sake of simplicity, we often assume them to be linear, which makes it much easier […]

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