Tag: Microeconomics (Field Of Study)

Maximizing Profit and the Average Cost Curve

Maximizing Profit and the Average Cost Curve

♪ [music] ♪ – [Alex] Now that we know how to find the profit maximization point, we’re going to show the amount of profit on the diagram using the average cost curve. So as I said in the last lecture, average cost is the cost per unit of output. That is, average cost is total …

Minimization of Total Industry Costs of Production

Minimization of Total Industry Costs of Production

♪ [music] ♪ – [Alex] In this chapter, we return to the invisible hand. We’re going to show some remarkable properties of competitive markets, properties that are a product of human action but not of human design. That is, these properties have neither been designed nor intended, nor perhaps even understood by market participants. And …

Entry, Exit, and Supply Curves: Increasing Costs

Entry, Exit, and Supply Curves: Increasing Costs

♪ [music] ♪ – [Alex Tabarrok] Now that we understand a firm’s cos tcurves, and its entry and exit decisions, we’re able to show how supply curves are actually derived from these more fundamental considerations. Let’s take a closer look. The supply curve is built upon firm entry and exit decisions and the effect of …

Entry, Exit, and Supply Curves: Constant Costs

Entry, Exit, and Supply Curves: Constant Costs

♪ [music] ♪ – [Alex] Okay — this talk is going to be a bit more involved. What we’re going to show is how a constant cost industry generates a flat supply curve. Let’s begin. A constant cost industry is one where it’s very easy to expand output without pushing up costs. So for example, …

The Costs and Benefits of Monopoly

The Costs and Benefits of Monopoly

♪ [music] ♪ – [Alex] In our final talk in monopoly, we’re going to discuss the costs of monopoly, but also the potential benefits. The major costs of monopoly is that compared to competition, monopoly is inefficient. It leads to a loss in the gains from trade or a deadweight loss. Let’s remind ourselves about …