Perfect Competition and Profit Maximization

This video goes over the basics of profit maximization for a perfectly competitive firm. We explore the profit maximizing point graphically by comparing marginal cost with marginal revenue. The perfectly competitive market structure is interesting because it has a constant price and average price because it is a price taker.
More information is available at www.freeeconhelp.com/2012/01/p...

[@jordanjones7762]

Learned more in the first 60 seconds of this video then i did in about 5 weeks of lectures

[@FreeEconHelp]

Awesome, glad you found it useful!

[@williamchan1613]

Jordan Jones can’t agree anymore than this

[@cocolopez7438]

Thank you so much!!! God bless you!! This makes more a lot of sense!!!

[@pritampatra6271]

Thanks for the video!!!!!!!! You explained the concept much better than my professor!!

[@mouminiumaru8300]

This is the best video on this topic slow and nice explanation others come shout and teach themselves thanks professor

[@serinacat4781]

very clear and well explained, thank you 😁✌️😆🎉

[@leKELSO]

this answered so many questions...thank you!!

[@DreJr]

This video was a great help. Thank you very much.

[@bonkemeyile6886]

thanks very much sir....im doing economics at varsity, is a semester module but since I've got so much to do i don't have real much time to learn it in text book, i only read the slides so what i am trying to say your lessons are indeed the best.

[@aguyy222]

thanks a lot! very well explained

[@luakii]

my test is in 2 hours this is the best explanation I've seen so far althhough im still lost but ill get there

[@JK-lk6mx]

Thank you for teaching me what my professor couldn't

[@jorgefortunato9295]

Perfect, many many thanks!

[@darienashley5873]

You are a living breathing Dank Meme. thank you

[@FreeEconHelp]

+Darien Ashley Thank you?

[@arnavsutodiya4468]

best explanation ever!!!!

[@imabdirahman5790]

Oh, Man You save my presentation today... Thanks 🙏🏽

[@FreeEconHelp]

Awesome, good luck!

[@thitikornkkaewduangden6620]

thx so much this is ANS for final EXAM of mine

[@AshishRayusa]

Very good explanation !!!

[@asfionasiva1]

thank you this was very helpful !!

[@SSS-sb3sw]

this is helpful! thank you

[@md8300cn]

THANK YOU SO MUCH!!

[@berkk1993]

just wonderful

[@roznevynam]

THANK YOU MAN!!!

[@Mustlight]

Thanks a lot.

[@riyadhbouddou6109]

sir ! you are a brilliant, your 7 mn summarize a book, tank you

[@FreeEconHelp]

Glad it helped!

[@azerothdss]

I understand now. Thank you

[@MrQuequowle]

Thank you !

[@narakusdemon.88]

Thanks so much!

[@aseelibra4886]

Thank you its very helpful

[@drewduenas6699]

Thank you

[@eshanair7054]

But if I sell it at a higher price than what it costs me to make, then would I not make more profit? Is it not better to produce at a point lower than the point where MC=MR?

[@necesarioshielamae1224]

Hi...how would you calculate TVC,TC,and PROFIT..if the given were only quantity and price and TFC..? Cost of materials is 50.80 per unit..and cost of labor is 51.10..

[@dianacanary2409]

thank you proff please do more videos short term runs

[@fabianhaule962]

thanx this is real so helpful

[@luakii]

thank you

[@RealDoomsie]

Dude. More learned in 3 minutes than 4-5 lectures.

[@smackdownhotel8830]

You explained it 1,000,000 x better than my professor ever could 👌🏻

[@hiyatrivedi1800]

Thank you sir

[@FreeEconHelp]

Awesome!

[@UndergroundBill]

Help me understand this pls , if you’re to the left, aren’t you earning more than revenue than the cost it takes to produce ? Shouldn’t you stick to the left of the diagram ?

[@TheWalkingsouls]

nice one. Thanks

[@mar8014]

Also why does more output lead to the weird parabolla shaped marginal cost curve...could you explain it more, im not smart so i can't just understand it by myself.

[@khadizaaktar4595]

thanks a lot

[@prayassambhare4367]

very very very nicely explained

[@FreeEconHelp]

Glad to help!

[@Gello1982]

Thank you prof :) but what about the short run shut down point? when AR is less than average variable cost?

[@abhisheksingh-tb4pw]

Gello that comes under supply curve of a perfect competition firm when price is equal to minimum of AVC

[@aayansherwani]

helped alot.

[@brandonbreton1453]

thank you
thank you
thank you
thank you

[@rampilla32]

I liked your pen (pencil?)..... may i know its make.

[@Childrensmathes]

Sir,maximisation of profit means high profit.At that point he will be getting high profit.But in the first diagram,mcost is less than mar.revenue.There he will be getting high profits.why can not he stop production at that point.can you explain this in simple terms if you have time,please.p siva rao,India.

[@mz2011pk]

thanks sir

[@oliyadworku5176]

What equilibrium means?

[@trisha8110]

THANKS

[@dattatreyaswain8340]

What about the second condition

[@sandeshb7132]

can someone tell me how the profit is going to increase when the cost of producing it is increasing ??

[@leozarni9570]

What I don't understand is why would a firm continue moving to the right towards MR= MC? To the left, MR>MC so they are making supernormal profit which is a good thing right? They are generating more revenue for each additional output than the cost required to produce one more.

[@ayamoukadem21]

exactly what I am thinking

[@Rdot19]

Thanks man..✌

[@FreeEconHelp]

Happy it helped!

[@harresyakubi2187]

when is this firm pareto optimal?

[@planbeplanner]

Good

[@synthiatinni1129]

@3.30 that line should be MC, right?

[@keithhudson3138]

I believe so.

[@ilonamuradova7786]

Great, thank you, helped a lot!

[@abzs1589]

does this apply to monopoly and imperfect market structure?

[@FreeEconHelp]

No, only perfect competition. Check out the other videos for imperfect market structures and monopoly.

[@sohcheewei]

A very helpful video!

[@jammiboi1]

You sound so much like doug from the hangover!

[@aman-vz1fq]

Love from india i am class 12th student from cbse boards

[@justinjayanand6852]

Sir can you give me example questions

[@rosiedan9740]

thank you so much sir! this was very helpful.

[@alvindaniswara8543]

just wondering, u mentioned about economic profit..does it mean the total economic profit?

[@JAFFER3657]

Just use 'profit'. Term economic profit=Implicit+Explicit Cost. Which is whole another topic. And yes he is talking about total profit firm would get from the production.

[@anishmanchanda4988]

Alvin Daniswara yeah economic profit or total economic profit means the same which equals implicit costs+explicit costs.
However accounting profit only includes explicit costs.It does not consider implicit costs or opportunity costs.

[@thedazills1351]

Would have been better if you used actual numbers for your examples...Because my graph doesn’t have an MR line

[@FreeEconHelp]

Sorry about that.

[@nathanielking6280]

I'm confused about the part at @1:30. How are you losing out on profit if your marginal revenue is greater than marginal cost?

[@LouieNJ]

Nathaniel King Because you can produce more, your profit isn't maximized. You aren't losing money per-say, you could just be making more(I think).

[@irGuilty]

correct

[@abibrown678]

This was so helpful.... i just wish you had better had writing!

[@eyerusalemkidane7595]

how ? price is low so loss profit ! if selling higher price d upper will be profit

[@lawclan8591]

what pencil are you using

[@FreeEconHelp]

Zebra M-402, it's awesome!

[@naya2276]

thankyouuuuuuuuuuuuuuuuuuuuuuuuuuu

[@luakii]

im gonna cry

[@user-ig2vo7jd6q]

Can someone please explain why MR = MC is where profit maximization occurs? I need help in this..

[@matthiasstepancich]

Because each time you produce a new unit, if MR>MC, it means profits will go up and you should keep producing, and, if MR

[@irGuilty]

When MC is less than MR, the price is higher than the cost productions, therefore will you be making profits. The more you increase production the more profit you will get until you reach the point where MR = MC. If you then continue to increase production after that point MC will be higher than MR, therefore it will cost more to make than you will receive for selling that product. Therefore the highest point of profit is where MR is equal to MC.

[@jorgefortunato9295]

I saved my life

[@buellerferris]

Because economic profit includes opportunity cost. If you could have produced one more unit and made a profit on it but didn't, you lose on opportunity costs. Make more sense now? :)

[@feellikereal3d81]

Background sound is poor...

[@mar8014]

I dont get why you are losing out on potential profit to the left of the point..since your revenue is more than cost it seems good because your making money and the less your revenue is than your cost, i would think the better...so i would think you are making the most profit for the next unit when you have the least number of units produced...

[@yakimyakim3067]

exactly

[@gartyqam]

shutyo dumb ass niga up

[@kip99283]

If u go left side u will decrease production and lose the profit

[@MeMe-iv4ld]

Nice pen

[@FreeEconHelp]

Zebra all the way.

[@mdc1802]

"As far back as I can remember I always wanted to be a gangster." I'm so glad Ray Liotta is doing economics videos now.
ruclips.net/video/_vUUdRsDgVA/видео.html

[@krj2009]

There is not enough information given to answer this question.

[@makemymarket1772]

Mc = Mr , Mc = Mr , Mc=Mr …..

[@jonakchetia]

Thank you