Chapter 13: The Cost of Production
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- Опубликовано: 31 июл 2024
- The objective of a firm: to maximize profit 1:14
Explicit vs implicit costs 2:59
Investments are not costs 7:24
Economic profit vs accounting profit 12:14
The production function 15:00
Marginal product 23:19
The law of diminishing marginal product 25:18
From the production function to the total cost curve 32:33
Fixed cost 43:34
Variable cost 45:03
Average fixed cost 47:04
Average variable cost 48:29
Average total cost 49:39
Marginal cost 50:57
The efficient scale of the firm 59:59
The relationship between marginal cost and average cost 1:00:50
Typical cost curves 1:03:09
The difference between the short-run and the long-run 1:06:54
Long-run average total cost 1:08:40
Economies and diseconomies of scale 1:15:37
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Why is the cost of raw materials not included in the TC(in the example)??
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We need concepts of another ch. Too..
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Hello,professor!where is chapter 8?
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You are really great teacher... How can i find the lectures other chapters?
Thank you! Here's the playlist for the principles of microeconomics videos that I have available right now. I also have macro videos available as well in a separate playlist.
ruclips.net/p/PLTjEimbqDkpBL55W6wye1jTcYePjehkT3
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where is chapter 12?
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Dr Azevedo, thanks for your great video, but I have a question regarding cost of production when attending my lecture.
My professor says that 'Technological advance may result that firm uses more capital and less labor, so fixed costs increase and variable costs decrease. ATC increases at low output levels and decreases at high output levels'.
But the ATC curve is U-shaped. The ATC should decrease at low output level and increase back at high output level instead of converse. My understand is that ATC curve looks like "concave downwards" when technology improves?? I actually don't understand what my professor means. Hope you can solve my question. Thanks!
Honestly, I'm not sure what your professor is saying either. Maybe there's a misunderstanding somewhere. Typically, we would think about a technological advance as shifting the cost curves. For example, technological progress typically makes production cheaper, so the cost curves would shift down. Firms can also freely substitute between capital and labor (in the long-run), so there's nothing wrong with saying that a firm's fixed costs could increase and variable cost could decrease. However, this is very different from describing how ATC is affected by changes in output. If your professor is saying that the ATC curve is inverted....that's not true.
Fixed costs are fixed....obviously. This means that AFC has to decline as output increases (because output is in the denominator). Variable costs increase as output increases. When you produce more output, you need more inputs, which costs more. AVC can be U-shaped, but will eventually increase due to the law of diminishing marginal product. If AFC is decreasing as output increases, and AVC is eventually increasing as output increases, the ATC curve is U-shaped. In other words, these two things together rule out the possibility of an "inverted" ATC curve.
@@DrAzevedoEcon I have tried by myself to figure what is the meaning of 'ATC increases at low output level and decrease at high output level' by contructing a table of Q, FC, VC ... like what you did in the video. It turns out that compared to original ATC curve, when TFC (thus AFC) increases and (TVC thus AVC) decrease, when Q is low, the new ATC curve starts from a higher position that original ATC curve. Then the new curve decrease more rapidly than old curve (so new and old curve intersects at one point). After that point, the new ATC curve is always below the original ATC curve. I think that is the actual meaning of my professor. Though still thank you professor as you let me understand more deeply why ATC curve has to be U-shaped. My professor just teach one example of shifting cost curve, and then just said 'Figure out other possibilities by yourself and read the rest of ppt'.
@@MKLee369 Happy to help!
Thankyou sir😊
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How you be doign the thang with the board??? ARe you being having writing backwards?? If so you are reall ygood at it!!! Love you, ZAndy
Not writing backward. I'm writing on glass, and then the image is reversed so that it's readable. Happy to help!
Perhaps it would be better if economic theories excluded the concept of opportunity cost. This is because it can lead to confusion and cannot be precisely quantified mathematically. There are countless potential opportunity events (for example, one of the myriad possibilities when someone decides to do something might be getting visited by aliens and gaining superpowers, haha). Even if we select the few with the highest benefits, it's still difficult to scientifically quantify them precisely. It might be better to choose several different path events and then compare their respective benefits.
Regarding the law of diminishing marginal utility, consider a treasure chest that requires five identical keys to be inserted simultaneously to open (or a lottery, where the more correct numbers you have, the bigger and faster the prize). In this scenario, each found key increases happiness progressively, with the joy from finding the last key potentially overwhelming someone with happiness. Additionally, there are cases where the combined effect of the parts is greater than their simple sum, resulting in an increasing effect.
also,For instance, the marginal utility of scientific discoveries or technological advancements, when viewed historically, is increasing. The benefits brought about by technological developments in the past few decades far surpass those of the past.
Please upload chapter 8 and other missing chapters
Saviour
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32:46
ARE YOU JESUS!!!
Nope...just an econ professor.
The you so much sir, I able to understand in depth about production and cost now,..
Cheers 🥂 to success 🥂