COMM 172 Study Guide - Midterm Guide: Linear Regression, Average Variable Cost, Average Cost
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= (p/q)( q/ p linear demand curve: demand curve that is a straight line. 4. 6: point elasticity of demand: price elasticity at a particular point on the demand curve. arc elasticity of demand: price elasticity calculated over a range of prices. 6. 1: t-statistic, standard error of the regression: estimate of the standard deviation of the regression error. 5. 2: scale economies index: sci = 1-ec, probability: likelihood that a given outcome will occur, expected value: probability-weighted average of payoffs associated with all possible outcomes, e = pr1x1 + pr2x2 + . 8. 6: zero economic profit: a firm is earning a normal return on its investment i. e. it is doing as well as it could by investing its money elsewhere. 10. 2: lerner index of monopoly power: measure of monopoly power calculated as excess of price over marginal cost as a fraction of price.
