18:53 is a good explanation as to why the monopolist will not produce in the inelastic portion of the demand curve. As a PhD student I will say that this is a very popular question even at the advanced level
@@otajonabduraxmonov3453 greater than -1 is between 0 and -1, which is the inelastic portion. Here he is taking elasticity as -ve value, for positive value formula will have a -ve sign
I honestly wish he could be my lecturer due to the way that he explains the work and makes use of simple examples that will stick and make things less complicated.
Yaa in the graph it should be , Q= 24-P ( look at 15.00 ), equations are : - P= 24-Q --------eq-1 MR = 24-2Q ---------eq-2 Flip the eq---1 And you get , Q= 24-P ----------eq-3 So graph is made up of eq-2 & eq-3.
@@ImVedanshAgarwal Better to think in the general case. Q = a - bP, P= (a - Q)/b, R = (aQ - Q^2)/b, MR = (a - 2Q)/b. So the slope of the original inverse demand curve -1/b will be = -2/b for any linear demand curve. As he says this would be a different relation in non-linear demand curves. This is because you have both the original price curve (a - Q)/b (dq/dq * P) and the new factor (dp/dq*Q = -Q/b) from the product rule. The -Q/b is EXACTLY the poisoning effect he talks about. Geometrically if you imagine the change, the bounding box of revenue (P*Q) is expanding to the right by the first term and being dragged down smaller by the second... at the limit.
I think the reason monopolists favor to be at the the elastic portion of the demand curve is because they get to maximize their profit. It is not contradict to the fact that at the same elastic portion of demand by producing more will the monopolist lose profit. Monopolists don't produce at the inelastic part of the demand curve simply because the outcome is not optimal profit maximization EVEN THOUGH they will get more profit by producing more. Therefore, I don't think the Professor's lecture is wrong. *If I am wrong feel free to correct me.
Financial accounting, cost management, financial management, tax accounting, commercial law, economics and business administration. Supplementary materials include lectures on commercial law, economics in one book, financial accounting notebooks, and tax law notebooks. The rest is the same problem-solving method.
at the end, when he discussed super market prices, he jumped to some conclusion about charging a lot bc people have to walk but that's incorrect. almost any time a company has a real estate cost (like rent for a super market) the rent is way higher in cities. this requires a greater markup.
@@jamescalderon289 i realize rent is a product of opportunity but that doesn't mean the rent is not the cost they need to cover before they make a profit. even if people bought less on each trip if they came back more frequently bc they still consume as much it would not be a big deal if instead of one big shopping trip per week they broke it down to 2. you can try to argue economies of scale like costco, as though customer by each item in bigger quantity, but not if they are buying the same pint of ice cream in both the downtown and the suburbs and that pint comes from the same distributor.
@@martingenet8799 they need to ensure they will be profitable in order to set up shop in the city however thats not what causes the mark up in cities. Products tend to be more expensive in cities due to higher demand
28:58 They can charge whatever the f.... hell they want. By now we have established he can (and will) use the f word when appropriate, but somehow the censored f word is way more impactful.
This course maximizes social welfare! :D
18:53 is a good explanation as to why the monopolist will not produce in the inelastic portion of the demand curve. As a PhD student I will say that this is a very popular question even at the advanced level
maybe monopolist willl not produce in Elastic portion, bcs if E>1 he said monopolist will lose money by producing one more unit
Hi friends. Can you guide me to follow any books along with these lecture
@@bipinmaurya3824 Microeceonomics Jeffery M. Perloff
@@otajonabduraxmonov3453 greater than -1 is between 0 and -1, which is the inelastic portion. Here he is taking elasticity as -ve value, for positive value formula will have a -ve sign
15:07 There is an error on the slide. The demand function is P = 24 - Q, there is P = 24 - 2Q.
I honestly wish he could be my lecturer due to the way that he explains the work and makes use of simple examples that will stick and make things less complicated.
at 15:22 the equation for the demand curve should 24 -Q and not 24-2Q
yeah thats what I thought, but no one in the class pointed out ...
This is incredible. Thank you MIT
Informative lecture..
Thanks for Providing such an Intersecting & Informative Lecture.
Absolutely well done and definitely keep it up!!! 👍👍👍👍👍
Such an enjoyable lecture!! Loved it
The slide on 15:25 reads Demand= 24-2q, it should be Demand =24-q.
Thank you, i spent way too long staring at this slide
This lecture is beneficial for society
Exactly what I need the night before exams
Thanks Thierry lecture is benefical for society
great lecture!
I found an error on the slide as Bruno had already pointed out. The demand function is P = 24 - Q, there is P = 24 - 2Q.
This professor is amazing but I can’t help but get Steve Carrell vibes from The Big Short. And I’m here for that!
theres an error on graph 11-3, d should be p=24-q not 2q as that would cause d and mr to have the same line
The Prof. is not very explicit regarding change in R/change in Q. Revenue is PQ. Differentiating Revenue with respect to Q gives the result
in 11:22.
He is only trying to make things clear by graphs and physical interpretations. His explanation of the equation says it all! Mathematics is only a tool
The mathematical aspect in his class is covered mostly by TAs, not the professor. He relies more on intuition.
Why is the demand curve and marginal revenue curve exactly the same: 24 - 2Q and yet they have different slopes?
Yaa in the graph it should be , Q= 24-P ( look at 15.00 ),
equations are : -
P= 24-Q --------eq-1
MR = 24-2Q ---------eq-2
Flip the eq---1
And you get ,
Q= 24-P ----------eq-3
So graph is made up of eq-2 & eq-3.
@@ImVedanshAgarwal Better to think in the general case. Q = a - bP, P= (a - Q)/b, R = (aQ - Q^2)/b, MR = (a - 2Q)/b. So the slope of the original inverse demand curve -1/b will be = -2/b for any linear demand curve. As he says this would be a different relation in non-linear demand curves. This is because you have both the original price curve (a - Q)/b (dq/dq * P) and the new factor (dp/dq*Q = -Q/b) from the product rule. The -Q/b is EXACTLY the poisoning effect he talks about. Geometrically if you imagine the change, the bounding box of revenue (P*Q) is expanding to the right by the first term and being dragged down smaller by the second... at the limit.
The equation shd be p=24-q
Demand equation
In 8:00 there is no need to consider marginal cost zero since we are talking about marginal revenue.
Well....it was jst for the sake of simplicity ig
I'm happy I spotted an error in one of the slides. How do I give feedback to the professor?
ocw.mit.edu/contact/
At 39:40 are A and C consumer surplus and B,D,E producer surplus??
PROFIT MAX ONWARDS
19:24 I think the Professor said it the other way around. Monopolist wants to be at the elastic portion of the demand curve.
Inelastic product demand is good for producers, elastic product demand is good for consumers.
I think the reason monopolists favor to be at the the elastic portion of the demand curve is because they get to maximize their profit. It is not contradict to the fact that at the same elastic portion of demand by producing more will the monopolist lose profit. Monopolists don't produce at the inelastic part of the demand curve simply because the outcome is not optimal profit maximization EVEN THOUGH they will get more profit by producing more. Therefore, I don't think the Professor's lecture is wrong. *If I am wrong feel free to correct me.
Absolute Value
Beneficial
There’s nothing else to do in Orlando are you serious 🧐
Financial accounting, cost management, financial management, tax accounting, commercial law, economics and business administration. Supplementary materials include lectures on commercial law, economics in one book, financial accounting notebooks, and tax law notebooks. The rest is the same problem-solving method.
Is this principles? This lecture seems more advanced than beginner level.
I don't understand why, but isn't this basic for graduation?
oneplus price discrimination in India vs US
The professor came to India as the first BC flight!
What is a BC flight?
@@9cgx business class flight
legendary
at the end, when he discussed super market prices, he jumped to some conclusion about charging a lot bc people have to walk but that's incorrect. almost any time a company has a real estate cost (like rent for a super market) the rent is way higher in cities. this requires a greater markup.
Not really, super market's in the city can sell more quantity due to their location, and the fact that they sell more in turn drives the rent up
@@jamescalderon289 i realize rent is a product of opportunity but that doesn't mean the rent is not the cost they need to cover before they make a profit. even if people bought less on each trip if they came back more frequently bc they still consume as much it would not be a big deal if instead of one big shopping trip per week they broke it down to 2. you can try to argue economies of scale like costco, as though customer by each item in bigger quantity, but not if they are buying the same pint of ice cream in both the downtown and the suburbs and that pint comes from the same distributor.
@@martingenet8799 they need to ensure they will be profitable in order to set up shop in the city however thats not what causes the mark up in cities. Products tend to be more expensive in cities due to higher demand
33.57
isnt the government in a fiat issuing country a monoplist
👍
I can charge for one product better, that's me ! Individuality 🇮🇳
28:58 They can charge whatever the f.... hell they want. By now we have established he can (and will) use the f word when appropriate, but somehow the censored f word is way more impactful.
The deep income parallely moan because smile electrophoretically march onto a uttermost barometer. filthy, minor celsius
Yo that's cool man but you are you gonna pass that shit?