Thanks for the kind comment! This is one I'm particularly pleased with 'cos it's a near certainty to come up (wonder if it'll be on the oligopoly question this year!).
Thanks for the kind comment. The diags are tricky (6 lines). I find 2 colour pens help (ignore the examiners!)... and look for the change in fixed costs, as that's the easiest to draw (also, that's why Labour and the LibDems are calling for a windfall tax on the energy producers at the moment). The opposite point- higher tax means they'll invest less might be valid, if only Shell(?.. may not be them) hadn't announced they were using their record profits for higher dividends & buying back shares i.e. nothing to do with investment. I think I've just evaluated the evaluation! Good luck with the mock. For the 'real' exam. if the diag comes up I think a good possibility is a question on impact of COVID/COVID recovery, as that would have been in the news (obviously!) when they were writing the paper. On the other hand I may well be wrong!
@@ThePhilbraithwaite Thanks and yeah I've given the diagram a bit of practice it looks an absolute mess when double shifting for a change in VC but I find the bigger I draw the diagram the more clearer it looks on the page. Hopefully this comes up on the actual exam!
What it means to identify ‘profit maximising quantity’ which is is identified when MR=MC? Can you perhaps provide a real-life example to explain this please?? Thanks
Literally what it says. MC=MR is the profit maximising output. Below this, revenue is rising by more than costs so increasing output will add to profit. Above this, costs are rising by more than revenues, so increasing output will decrease profit. I think maybe you need to check out why MC=MR is profit max before looking at this video which goes into slightly more advanced use of it (or ask your teacher) On your second question, the answer is no! (in just the same way as a macroeconomist couldn't provide a real life example of a world in which there are just two countries producing 2 goods under conditions of constant returns when explaining Ricardo's Theory of Comparative Advantage). Economics is a social science and an art as well as, in this case a science. i.e. we are providing scientific proof of profit maximisation. In the real world, hardly any firm knows the shape of its demand curve much beyond its current price level. That's why examiners love to ask essay questions looking at different objectives (and applying them to the real world) Hope this is helpful
![A-Level Economics [Theme 3]: Drawing Cost and Revenue Diagrams](http://i.ytimg.com/vi/HioeOEstg7M/mqdefault.jpg)
One of the best A-level Economics channels on YT - thank you lots for your detailed videos, I watch them all the time!
Thanks for the kind comment! This is one I'm particularly pleased with 'cos it's a near certainty to come up (wonder if it'll be on the oligopoly question this year!).
Thank You for this video! I found this very helpful! You explained it clear and well!
No problem! Thanks for the comment!
says "the examiner say you must use black ink" then says "strongly suggests you ignore it" advice noted lol
Thanks... they're there to mark economics, not artistic choice of pen colour!
Thanks for this - very well explained. Was struggling with this but should be able to apply it to my Mock exam next week!
Thanks for the kind comment. The diags are tricky (6 lines). I find 2 colour pens help (ignore the examiners!)... and look for the change in fixed costs, as that's the easiest to draw (also, that's why Labour and the LibDems are calling for a windfall tax on the energy producers at the moment). The opposite point- higher tax means they'll invest less might be valid, if only Shell(?.. may not be them) hadn't announced they were using their record profits for higher dividends & buying back shares i.e. nothing to do with investment. I think I've just evaluated the evaluation!
Good luck with the mock.
For the 'real' exam. if the diag comes up I think a good possibility is a question on impact of COVID/COVID recovery, as that would have been in the news (obviously!) when they were writing the paper. On the other hand I may well be wrong!
@@ThePhilbraithwaite Thanks and yeah I've given the diagram a bit of practice it looks an absolute mess when double shifting for a change in VC but I find the bigger I draw the diagram the more clearer it looks on the page. Hopefully this comes up on the actual exam!
Thank you, very well and simply explained!
Glad it was helpful! (sorry for such a late reply!)
legend
How can I have left this uncommented on for a year!? Thank you. Leg end is probably what my students would call me
This is great and clear, thanks.
Glad it was helpful!
Very helpful, thanks a lot.
No probs- glad you found it useful
Thank you for this explanation
No probs- thanks for the comment!
cold guy
What it means to identify ‘profit maximising quantity’ which is is identified when MR=MC? Can you perhaps provide a real-life example to explain this please??
Thanks
Literally what it says. MC=MR is the profit maximising output. Below this, revenue is rising by more than costs so increasing output will add to profit. Above this, costs are rising by more than revenues, so increasing output will decrease profit.
I think maybe you need to check out why MC=MR is profit max before looking at this video which goes into slightly more advanced use of it (or ask your teacher)
On your second question, the answer is no! (in just the same way as a macroeconomist couldn't provide a real life example of a world in which there are just two countries producing 2 goods under conditions of constant returns when explaining Ricardo's Theory of Comparative Advantage). Economics is a social science and an art as well as, in this case a science. i.e. we are providing scientific proof of profit maximisation. In the real world, hardly any firm knows the shape of its demand curve much beyond its current price level. That's why examiners love to ask essay questions looking at different objectives (and applying them to the real world)
Hope this is helpful