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How to Solve for Maximum Output from Total Product Function
 
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This video shows how to solve for the firm's maximum level of output if given the firm's short-run production function or total product of labor function.
Views: 270 1sportingclays
How to calculate Average Product, Total Product, Marginal Product
 
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Visual tutorial on production theory. This video uses numbers to explain total product, average production, and marginal product. These are typical topics discussed in economics and especially microeconomics classes. Like us on: http://www.facebook.com/PartyMoreStudyLess PlayList on Production Theory : http://www.youtube.com/playlist?list=PLFF0FC31E6A4D8E82 Related Videos International Trade Edgeworth Box Diagram http://www.youtube.com/watch?v=7QFAQJBq1uk
Views: 192285 Economicsfun
Diminishing Marginal Returns- Micro 3.1
 
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I explain the idea of fixed resources and the law of diminishing marginal returns. I also discuss how to calculate marginal product and identify the three stages of returs: increasing, decreasing, and negative returns. For more econ stuff, visit my website www.ACDCEcon.com Get the Ultimate Review Packet http://www.acdcecon.com/#!review-packet/czji High school version of this video- https://www.youtube.com/watch?v=_TQ62MwzSrY Next Video- Economies of Scale https://www.youtube.com/watch?v=JdCgu1sOPDo Econmovies- https://www.youtube.com/playlist?list=PL1oDmcs0xTD9Aig5cP8_R1gzq-mQHgcAH Twitter (#askclifford) https://twitter.com/acdcleadership?lang=en By the way, I had some songs from West Side Story in my head while I was filming.
Views: 630838 Jacob Clifford
Introduction to Production Introduction (Average Product, Marginal Product, Total Product)
 
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Visual explanation of Production Theory, Total Product, Average Product, and Marginal Product of Labor used in economics classes. This is the first of three videos on the play list. Like us on: http://www.facebook.com/PartyMoreStudyLess
Views: 147926 Economicsfun
Short-Run Production: Marginal Product and Average Product
 
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This video provides a mathematical review (some calculus is used) of the key concepts in short-run production. You will learn how to derive the average product of labor and marginal product of labor functions,including how to find maximum short-run output, where average product is maximized, and where diminishing marginal returns to labor begin.
Views: 14375 1sportingclays
Understanding the relationships between Total, Marginal and Average Product
 
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Understanding the relationships between a firm's short-run productivity curves will provide us with a basis for understanding how a firm's costs of production change as the firm varies its level of output in the short-run. Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! http://econclassroom.com/?page_id=5870
Views: 127493 Jason Welker
production theory: cost-minimizing input choice (optimal input mix)
 
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This videos describes how to produce a given level of output by choosing the cost-minimizing quantities of labor and capital inputs.
Views: 98008 1sportingclays
Total product, marginal product and average product | APⓇ Microeconomics | Khan Academy
 
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The short-run production function describes the relationship between output and inputs when at least one input is fixed, such as out output varies based on the amount of labor used. We can use this production function to find the total product of labor, the marginal product of labor, and the average product of labor. AP(R) Microeconomics on Khan Academy: Microeconomics is the study of individual decisionmakers in an economy, such as people, households, and firms. Learn how markets work, how incentives drive decisionmaking, and how market structure influences market outcomes. We hit the traditional topics from an AP Microeconomics course, including basic economic concepts, markets, production and costs, profit maximization perfect competition, imperfectly competitive market structures, game theory, factor markets, and income inequality. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
Views: 12588 Khan Academy
Maximizing Profit Under Monopoly
 
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AIDS has killed more than 36 million people worldwide. There are drugs available to treat AIDS, but the price of one pill is incredibly high in the U.S. — coming in at 25 times higher than its cost. Why is that? In this video, we show how patent rights have created a monopoly in the U.S. market for AIDS medication, causing pills to be very expensive. In other countries, however, such as India, which does not recognize patents on AIDS medication, prices remain low. Using this example, we go over how monopolies use market power to increase prices. Microeconomics Course: http://bit.ly/20VablY Ask a question about the video: http://bit.ly/1S1xKt8 Next video: http://bit.ly/21rj3C7 Help us caption & translate this video! http://amara.org/v/GSLJ/
Micro 3.5 AP Economics Marginal Product and Marginal Cost: Econ Concepts in 60 Seconds Review
 
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New video for this topic- https://www.youtube.com/watch?v=C3m9FC3T3vw In this video I explain the relationship between marginal product and marginal cost. The bonus round explains a numeric example that shows that MP and MC are mirror images of each other. Please keep in mind that these clips are not designed to teach you the key concepts. These videos are a review tool to help you better understand what you learned in class. ACDC is Mr. Clifford's teaching philosophy: Active Learning Cooperative Learning Discovery Learning Community
Views: 281240 Jacob Clifford
Cost of production:  Marginal product and marginal cost
 
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As marginal product increases marginal cost decreases. As marginal product declines marginal cost increases. When marginal product is at its maximum marginal cost is at its minimum. Behind the shape of the marginal cost curve is the marginal product curve and this explains why the supply curve is upward sloping.
Views: 6358 lostmy1
The Marginal Product of Labor
 
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In this video on the marginal product of labor, we discuss some commons questions such as: How are wages determined? Why do most Americans earn so much by global standards? What exactly is meant by ‘human capital’? Do labor unions help workers, and if so, by how much? How does discrimination affect labor markets? How is the demand for labor different than the demand for a good? We’ll discuss how to derive the demand for labor based on the marginal product of labor, and use real-world examples — such as the demand for janitors in a fast food restaurant — to illustrate this calculation. We’ll also cover an individual’s labor supply curve vs. market supply of labor. Microeconomics Course: http://bit.ly/20VablY Ask a question about the video: http://bit.ly/1T7fDDC Next video: http://bit.ly/21Zs6u9 Help us caption & translate this video! http://amara.org/v/GZRc/
B.4 Marginal rate of technical substitution | Production - Microeconomics
 
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Learn more: http://www.policonomics.com/marginal-rate-of-technical-substitution/ Spanish version: https://youtu.be/RmO5Ckm4Tb0 This video explains how to calculate and use the marginal rate of technical substitution (MRTS). We start by learning how to calculate it, then move on to use it in order to properly draw isoquant curves and, finally, we analyse the MRTS for different kinds of isoquants. Related videos: -Isoquants: https://www.youtube.com/watch?v=xKUP1GEuUCc&list=PLr3ti8G3MCupcsVLkr7ayC_ziNbi9l4De&index=3 -Production function: https://www.youtube.com/watch?v=A5E1sOYh6No&list=PLr3ti8G3MCupcsVLkr7ayC_ziNbi9l4De&index=2 Related articles: -Marginal rate of substitution: http://www.policonomics.com/marginal-rate-of-substitution/ -Isoquants: http://www.policonomics.com/isoquant/ Thank you for watching! http://www.policonomics.com Learn, and enjoy!
Views: 82600 Policonomics
The Theory of Production, Marginal Product, Average Product
 
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Tutorial on Marginal Product, Production Theory for microeconomics and managerial economics classes. Like us on: http://www.facebook.com/PartyMoreStudyLess
Views: 62233 Economicsfun
Marginal Product and Marginal Cost
 
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This lesson is on the relationship between marginal product and marginal cost. This lesson will also discuss the relationship between the supply curve and the marginal cost curve. The marginal cost curve will go down than up because of the law of diminishing marginal returns. The marginal cost curve is the most important cost curve of the firm.
Views: 16366 Chris Thomas
Marginal Cost and Average Total Cost- Micro 3.4
 
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In this video I explain why MC decreases and then increases and why the MC hits ATC at the minimum point of the ATC curve. Very exciting stuff! Thanks for watching. Please subscribe.
Views: 682747 Jacob Clifford
Optimal Labor Usage: Marginal Revenue Product = Wage
 
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I discuss how to find the profit-maximizing quantity of labor in the short run (i.e., when capital is fixed), providing two numerical examples.
Views: 12901 1sportingclays
Cobb-Douglas Production Function Differentiation Example
 
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Given the basic form of the Cobb-Douglas production function, we'll find the partial derivatives with respect to capital, K, and labor, L. Thereby finding the marginal products of capital and labor. Starting with Cobb-Douglas production function: Y=F(K,L)=AK^α L^(1-α) Derivative of output w.r.t. Labor, then differentiation of production with respect to capital. Finding the wage rate and marginal product of labor. And finding the rental rate and the marginal product of capital. More Intermediate Macro Video: https://sites.google.com/site/curtiskephart/ta/intermediate-macro-solutions
Views: 221497 economicurtis
Cost of production:  Law of diminishing returns (TP, MP and AP)
 
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According to the law of diminishing returns marginal product first increases, reaches a maximum and then starts to decline. Total product first increases at an increasing rate followed by a diminising rate and then starts to decline.
Views: 23942 lostmy1
Relationship between TP, AP and MP Curves
 
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Relationship between TP, AP and MP Curves watch more videos at https://www.tutorialspoint.com/videotutorials/index.htm Lecture By: Ms. Madhu Bhatia, Tutorials Point India Private Limited
Deriving Short-run Cost Functions from a Cobb-Douglas Production Function
 
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This video derives all seven of the firm's short-run cost functions from a Cobb-Douglas production function.
Views: 102523 1sportingclays
Marginal Revenue, Average Cost, Profit, Price & Demand Function - Calculus
 
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This calculus video tutorial explains the concept behind marginal revenue, marginal cost, marginal profit, average cost function, price and demand functions. It shows you how to find the production level to minimize the average cost as well as how to find the minimum average cost so as to maximize the profit of a company. This video contains plenty of examples and practice problems. Here is a list of topics: 1. Cost Function - The price to a produce a number of items 2. Average Cost - The average price to produce a single unit 3. Production Level - The number of units or x 4. Marginal Cost - Derivative of the Cost Function 5. Marginal Cost represents the increase in total cost to produce one extra item 6. Minimizing Average Cost Function - Finding The Production Level and the Minimum Average Cost 7. Price Function or Demand Function - The selling price of an item as a function of x 8. Supply vs Demand - Inverse Relationship - Business & Economics 9. Business Calculus - Revenue = Price Function x Number of Units (x) 10. Marginal Revenue, Marginal Cost, and Marginal Profit 11. Maximizing Profit - Finding the maximum value using the derivative function
19. Short Run Production, Marginal and Average Product
 
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This video describes the key components of short run production: marginal and average product. In particular, I give reasons for (1) why MP and AP are typically inverse-U shaped, and (2) why MP intersects AP at AP's maximum. There is also a more general discussion of the relationship of average to marginal. For a list of videos and links to these videos (organized by topic), check out the Intromediate Microeconomics video web page: http://blog.thisyoungeconomist.com/p/learn-microeconomics.html
Views: 46729 intromediateecon
Total Product, Marginal Product, and Average Product of Labor
 
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Looks at the relationship between these three labor curves. Please note that an error occurs for the last MPL: it should be -20 and not -10.
Views: 19500 Guy Pascale
How to Find Where Average Product of Labor is Maximized
 
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This video shows the mathematics of how to find where the average product of labor is maximized.
Views: 115 1sportingclays
Marginal Revenue Product, Marginal Product of Labor, MRP, MPL Explanation
 
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For the Advanced Microeconomics Review please go to: http://bit.ly/2aj1txm "AP" is owned by the College Board which does not endorse this site or the above review. Study questions: 1) How does a firm determine how many workers to use? 2) How is MRP & MPL calculated? 3) If the wage of employees in perfect competition goes up, what would you expect to happen to the number of workers that the firm uses? 4) If demand for the product goes up (so price goes up), what would you expect to happen to the number of employees used? Explain 5) Based on the numbers below, state how many workers you think should be used. Assume that the product is produced in a perfectly competitive market where price = $2. Also, assume that labor is in a perfectly competitive market, with a going wage of $40 per day... # of workers 0 & output = 0 # of workers 1 & output = 30 # of workers 2 & output = 50 # of workers 3 & output = 65 # of workers 4 & output = 75 # of workers 5 & output = 79 6) Do the output numbers in question five show the law of diminishing marginal returns? Why or why not?
Views: 154590 AdvancedEcon
Marginal Cost and Marginal Revenue
 
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This video looks at Marginal Cost and Marginal Revenue, and explains how they lead to an equilibrium of quantity supplied. It is setting up these concepts to apply to different types of markets (eg perfect competition, monopoly) in future videos.
Views: 106345 Steve Lobsey
Maximizing Profit Practice- Micro 3.9
 
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In this video I explain how to identify the profit maximizing quantity and calculate total revenue and profit. MR=MC is the most important concept in microeconomics. Thanks for watching. Get the packet and support ACDCEcon https://www.youtube.com/watch?v=SxBL54a3-QQ Macroeconomics Videos https://www.youtube.com/watch?v=XnFv3d8qllI Microeconomics Videos https://www.youtube.com/watch?v=swnoF533C_c Watch Econmovies https://www.youtube.com/playlist?list=PL1oDmcs0xTD9Aig5cP8_R1gzq-mQHgcAH Follow me on Twitter https://twitter.com/acdcleadership
Views: 646064 Jacob Clifford
Cost of production: Marginal product and marginal cost
 
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As marginal product increases marginal cost decreases. As marginal product declines marginal cost increases. When marginal product is at its maximum marginal cost is at its minimum. Behind the shape of the marginal cost curve is the marginal product curve and this explains why the supply curve is upward sloping.
Views: 124 econom
The Production Function, Finding the Wage Rate, Rental Rate, and Labor's Share of Income
 
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In this problem we're given a simple production function, a partially parameterized Cobb-Douglas Production Function. We derive output/production, then find the real wage rate (finding the marginal product of labor) and the rental rate of capital (finding the marginal product of capital along the way... actually the marginal product of land, but it's the same steps to find MPK). Lastly, finding the labor share of income, and the capital share of income. Plus a "trick" to find the factor share of income by just looking at the Cobb-Douglas production function. Part 1 of 3 - This video solves parts a and b below. More Intermediate Macro Video: https://sites.google.com/site/curtiskephart/ta/intermediate-macro-solutions ------------------------------------------ Suppose the production function in medieval Europe is Y=K^0.5 L^0.5, where K is the amount of land and L is the amount of labor. The economy begins with 100 units of land and 100 units of labor. Use a calculator and equations in the chapter to find a numerical answer to each of the following questions. a. How much output does the economy produce? b. What are the wage rate (skip to 5:33) and the rental price of land (skip to 18:00)? c. What share of output does labor receive? d. If a plague kills half the population, what is the new level of output? e. What is the new wage and rental price of land? f. What share of output does labor receive now? From Mankiw "Macroeconomics" (Intermediate level), 8th edition, Chapter 3 (The Open Economy) - Problem 2 -------------------------------------------------------------------------------------
Views: 71599 economicurtis
Average Product and Marginal Product of Capital and Labor - Sample Problem
 
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Measures of Productivity - Average Product and Marginal Product of Capital and Labor - Sample Problem without Calculus
Views: 45621 jsearcysfc
MN1015 Lecture 8 Output and Costs
 
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To increase output in the short run, a firm must increase the amount of labor employed. Three concepts describe the relationship between output and the quantity of labor employed: 1. Total product TP 2. Marginal product MP 3. Average product AP Product Schedules Total product is the total output produced in a given period. The marginal product of labor is the change in total product that results from a one-unit increase in the quantity of labor employed, with all other inputs remaining the same. The average product of labor is equal to total product divided by the quantity of labor employed. As the quantity of labor employed increases: Total product increases. Marginal product increases initially …but eventually decreases. Average product decreases. The law of diminishing returns states that: As a firm uses more of a variable input with a given quantity of fixed inputs, the marginal product of the variable input eventually diminishes. AP & MP curves When MP exceeds AP, average product increases. When MP below AP, average product decreases.When MP equals AP, average product is at its maximum. Short-Run Cost To produce more output in the short run, the firm must employ more labor, which means that it must increase its costs. Three cost concepts and three types of cost curves are - Total cost TC - Marginal cost MC - Average cost AC A firm’s total cost (TC) is the cost of all resources used. Total fixed cost (TFC) is the cost of the firm’s fixed inputs. Fixed costs do not change with output. Total variable cost (TVC) is the cost of the firm’s variable inputs. Variable costs do change with output. TC = TFC + TVC TFC is the same at each output level. TVC increases as output increases. TC, the sum of TFC and TVC, increases as output increases. Marginal cost (MC) is the increase in total cost that results from a one-unit increase in total product. Over the output range with increasing marginal returns, MC falls as output increases. Over the output range with diminishing marginal returns, MC rises as output increases. Average Cost Average cost measures can be derived from each of the total cost measures: Average fixed cost (AFC) is total fixed cost per unit of output. Average variable cost (AVC) is total variable cost per unit of output. Average total cost (ATC) is total cost per unit of output. ATC = AFC + AVC. The AFC falls as output increases The AVC curve is U-shaped. As output increases, AVC falls to a minimum and then increases. ATC is U-shaped For outputs over which AVC is falling, MC is below AVC. For outputs over which AVC is rising, MC is above AVC. For the output at minimum AVC, MC equals AVC. For the outputs over which ATC is falling, MC is below ATC. For the outputs over which ATC is rising, MC is above ATC. For the output at minimum ATC, MC equals ATC.
Views: 2526 Hanomics
Figuring Marginal Physical Product and Marginal Revenue Product
 
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A video about how to quickly figure MPP (marginal physical product) and MRP (marginal revenue product). It sounds scarier than it really is.
Views: 16514 Kyle Purpura
Marginal revenue product and labor
 
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marginal revenue product and labor
Views: 3635 HorowitzEconomics
Production Possibilities Curve- Econ 1.1
 
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In this video I explain how the production possibilities curve (PPC) shows scarcity, trade-offs, opportunity cost, and efficiency. This is the first graph you are going to learn in your economics class. Thanks for watching. Please subscribe. If you need more help, check out the Ultimate Review Packet http://www.acdcecon.com/#!review-packet/czji
Views: 1135690 Jacob Clifford
MICROECONOMICS I How To Calculate Total Product, Average Product and Marginal Product
 
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Online Private Tutoring at http://andreigalanchuk.nl Follow me on Facebook: https://www.facebook.com/galanchuk/ Add me on Linkedin: https://www.linkedin.com/in/andreigalanchuk?trk=nav_responsive_tab_profile
Views: 2961 Andrei Galanchuk
Microeconomics Practice Problem - Utility Maximization Using Marginal Utility and Prices
 
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This video shows how to use marginal utility and prices to maximize utility. The problem is taken from Economics: Principles and Applications, 6th Edition, by Robert Hall and Marc Lieberman, and is Ch. 6 problem #3. See the "Practice Problems" playlist for an archive of daily practice problems. For more information and a complete listing of videos and online articles by topic or textbook chapter, see http://www.economistsdoitwithmodels.com/economics-classroom/ For t-shirts and other EDIWM items, see http://www.economistsdoitwithmodels.com/merch/ By Jodi Beggs - Economists Do It With Models http://www.economistsdoitwithmodels.com Facebook: http://www.facebook.com/economistsdoitwithmodels Twitter: http://www.twitter.com/jodiecongirl Tumblr: http://economistsdoitwithmodels.tumblr.com
Views: 145405 jodiecongirl
How to Derive Marginal Cost (MC = Wage/MP) from Production Function
 
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This video derives the following expression for marginal cost: MC = wage/marginal product of labor, which is then used along with the firm's production function to solve for the marginal cost equation.
Views: 365 1sportingclays
Cost.2.TP.MP.U2.T3
 
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Ron Cipcic explains the relationship between total production and marginal product and cost.
Views: 1399 rcipcic
Relation between TR and MR , Relation between AR and MR in hindi, Concept of revenue Part -2
 
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Microeconomics chapter 9 Concept of Revenue Part B Relation between TR and AR Relation between AR and MR Relation between Total revenue and marginal revenue Relation between average revenue and marginal revenue behaviour of TR , AR and MR in perfect competition market behaviour of TR , AR and MR in Monopolistic and monopoly competition market total revenue Vs marginal revenue average revenue vs marginal revenue relation between total, average and marginal revenue concept of cost complete chapter https://www.youtube.com/watch?v=6VA7o... microeconomics chapter 1 economics and economy https://www.youtube.com/watch?v=g41OM... microeconomics chapter 2 cental problems of an economy https://www.youtube.com/watch?v=KYJ62... microeconomics chapter 3 consumer's equilibrium utility analysis https://www.youtube.com/watch?v=-DpcD... microeconomics chapter 4 consumer's equilibrium indifference curve analysis https://www.youtube.com/watch?v=d3Upk... microeconomics chapter 5 theory of demand https://www.youtube.com/watch?v=hc0uP... microeconomics chapter 6 price elasticity of demand https://www.youtube.com/watch?v=G7Zvw... microeconomics chapter 7 production function and returns to factor https://www.youtube.com/watch?v=9CxaK...
Marginal Costing 43 Labour is Key Factor   Optimal Product Mix
 
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Cost and Management Accounting MBA, MCA, CA, CPT, CS, CWA, CMA, FOUNDATION, CPA, CF, BBA, BCOM, MCOM, Grade-11, Grade-12, Class-11, Class-12, CAIIB, FIII, UPSC, RRB, Competitive Exams, Entrance Exams Marginal Costing - 43 Key Factor Analysis: The main objective of any business enterprise is to maximize its profit. For maximizing the profit, all resources must be utilized to its maximum capacity and sale maximum quantity of products, which yield highest individual marginal contribution. A key factor or limiting factor or scarce factor is one, which restricts the production or profitability of an undertaking at a particular point of time or over a period. There may be scarcity of material, labour, capital, plant-capacity or even sales. These key factors puts limit on the production and profitability of business enterprise. The extent of its influence must be assessed first so as to maximize the profits. Thus, when there is a scarce factor and where the business has two or more product lines, the problem of utilizing such scarce factor to the best possible manner arises. In such case, according to the marginal costing, scarce resource must be utilized for those product lines whose contribution per unit of scarce factor is relatively more. Profitability = Contribution per unit/Key factor i.e. Profitability here means the contribution per unit of the key-factor. When the Sales Quantity/Volume/Units being the Key Factor: Problem: Particulars A B C Units budgeted to be produced and sold 1,800 3,000 1,200 Selling price per unit (Rs.) 60 55 50 Requirement per unit: Direct materials (kg.) 5 3 4 Direct labour (hours) 4 3 2 Variable overheads (Rs.) 7 13 8 Fixed overheads (Rs.) 10 10 10 Cost of direct material per kg. (Rs.) 4 4 4 Direct labour rate per hour (Rs.) 2 2 2 Maximum possible units of sales (idemand) 4,000 5,000 1,500 All the three products are produced from the same direct material using same type of labour and machines. Only 18,600 direct labour hours will be available during the period. Find out the most profitable product-mix and the profit under that product-mix. - www.prashantpuaar.com
Views: 3959 Prashant Puaar
What marginal benefit equals marginal cost means in economic terms
 
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This video goes over the classic equation in economics MB=MC. The video explains what it means, and how we can get to it with three different examples. Basically we care about efficiency. If marginal benefit is not equal to marginal cost then something is going wrong in the problem. Either our budget ran short or the firm is over/under producing. By looking at the context of the problem we can figure out what is going wrong and why marginal benefit is not equal to marginal cost within this context. It is also possible that market failures are occurring which is covered in another video. More information on this topic can be found at http://www.freeeconhelp.com/2011/10/what-causes-aggregate-supply-curve-to.html
Views: 107270 Free Econ Help
Marginal Revenue, Marginal Cost, Marginal Profit
 
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Marginal = DERIVATIVE. Marginal Revenue is the extra $ brought in by selling/producing exactly one more unit Marginal Cost is the extra $ lost by selling/producing exactly one more unit Marginal Profit is the difference between these two ... it's the $ made (revenue minus costs) from selling/producing one more unit.
Views: 34901 mroldridge
MN1015 Lecture 9 Long Run Cost
 
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In the long run, all inputs are variable and all costs are variable. The behavior of long-run cost depends upon the firm’s production function. The firm’s production function is: The relationship between the maximum output attainable and the quantities of both capital and labor. Long Run Cost As the size of the plant increases, the output that a given quantity of labor can produce increases. But for each plant, as the quantity of labor increases, diminishing returns occur. Diminishing Marginal Product of Capital The MP of capital is the increase in output resulting from a one-unit increase in the amount of capital employed, holding constant the amount of labor employed. A firm’s production function exhibits: - Diminishing marginal returns to labor (for a given plant) - Diminishing marginal returns to capital (for a quantity of labor). For each plant, diminishing MP of labor creates a set of short run, U-shaped cost curves for MC, AVC, and ATC. Long Run Average Cost Curve The LRAC curve is made up from the lowest ATC for each output level. We need to decide which plant has the lowest cost for producing each output level. The LRAC curve is the relationship between the lowest attainable average total cost and output when both the plant and labor are varied. The LRAC curve is a planning curve that tells the firm the plant that minimizes the cost of producing a given output. Once the firm has chosen its plant, the firm incurs the costs that correspond to the ATC curve for that plant. Economies of Scale and Diseconomies of Scale Economies of scale are features of a firm’s technology that lead to falling long-run average cost as output increases. Diseconomies of scale are features of a firm’s technology that lead to rising long-run average cost as output increases. Constant returns to scale are features of a firm’s technology that lead to constant long-run average cost as output increases. Minimum Efficient Scale It is the quantity of output at which the long-run average cost reaches its lowest level. If the LRAC curve is U-shaped, the minimum point identifies the minimum efficient scale output level.
Views: 805 Hanomics
The Law of Increasing Opportunity Cost and the PPC Model
 
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In a previous lesson we introduced the basic economic concepts of scarcity, opportunity cost, and the production possibilities curve (PPC). In that lesson, we examined the tradeoffs an individual faces in the use of her time between "work" and "play". We showed that the opportunity cost of one hour of work is always the one hour of play that the individual could have enjoyed instead. The constant opportunitiy cost between work and play is illustrated in the PPC model as a straight line production possibilities curve. In this lesson, we will expand our understanding of the PPC and opportunity costs by examining the tradeoff a nation faces between the production of two goods using its scarce resources. Cars and pizzas require very different resources to produce, and therefore, as the production of one good increases, the opportunity cost of its production in terms of the other good increases. The result is a PPC that is bowed outwards from the origin. When choosing between the production of two goods, the more similar the resources needed to produce each good, the straighter the PPC will be. The less similar the resources needed to produce each good, the further the PPC will be bowed out from the origin. Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! http://econclassroom.com/?page_id=5870
Views: 107184 Jason Welker
Ex: Given the Cost and Demand Functions, Maximize Profit
 
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This video explains how to maximize profit given the cost function and the demand function. Site: http://mathispower4u.com
Views: 48598 Mathispower4u
Profit Maximization
 
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This video shows how to maximize profit, and it derives the condition under which profit is maximized. For more information and a complete listing of videos and online articles by topic or textbook chapter, see http://www.economistsdoitwithmodels.com/economics-classroom/ For t-shirts and other EDIWM items, see http://www.economistsdoitwithmodels.com/merch/ By Jodi Beggs - Economists Do It With Models http://www.economistsdoitwithmodels.com Facebook: http://www.facebook.com/economistsdoitwithmodels Twitter: http://www.twitter.com/jodiecongirl Tumblr: http://economistsdoitwithmodels.tumblr.com
Views: 262017 jodiecongirl