Maximizing Profit Under Competition

A company in a competitive environment does not control prices. So the key to maximizing profit is choosing how much to produce. To do that, we need to factor in the costs involved in production. So what exactly are the costs? How do these costs influence how you maximize profit? And, remember, if you want to think like an economist, you must factor in opportunity cost!
In this video, we define profit, including how to calculate total revenue and total cost. We also go over fixed costs, variable costs, marginal revenue, and marginal cost.

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[gracexing]

The idea of margins is something so important and fundamental in economics that every econ teach ought to give a clear clarification of it before moving on. However, most of the teachers simply just don't do it. Thank you guys so much and I wish I could've found this video before my perfect&monopoly test ahead of time T_T

[Amanda_Huang]

that is so clearly explained, thank you so much!

[rheagupta]

Thanks a lot sir . Paying respect from India

[chloez]

Thank you so much! The video helps a lot!

[stefanoguidone]

I watched this and other videos, great resource, WELL DONE!

[subrotochatterjee]

At 10:39, you’re saying that P=MC. That’s true only at the point where the marginal cost curve intersects the price (or MR or AR curve, the horizontal line). Instead of writing it as P=MC, it should read as P=MR. At the point of intersection, P=MR=MC.

[j.maruri]

Awesome video to you guys!! Definitely earned a subscriber!

[hongvannguyenthi]

Oh my god, this's saved my life immediately for my upcoming presentation
Awsome chanel🤩

[ajlenze]

Some of the Practice Questions linked to this video (those about temporarily shutting down) would be better to ask after the next video.

[saraluisagalluzzo]

Thank you so much! Such a great video!

[selinsaki]

There's a mistake in this video. It should have been P=MR, for your information. Location: 11:40

[whatsinaname]

I didn't get what opportunity costs are associated to economic profit.

[ndeshiericka]

How to calculate maximum achieveable profit

[JimmyDealz]

Thanks for making me listen to you read slides and not actually explaining anything

[GraceCreatesLivingSpace]

At the beginning you keep saying price is equal to marginal revenue, then you switch and start saying price is equal to marginal cost. Did I miss something? Or is it because we are looking for maximum profit in which case all three would be equal? That point could use some clarification.

[magicmushroom]

this seems counter intuitive to me; surely if something costs $5 and the revenue is $5 you've made nothing?

[old_romans]

Strippers and Donkeys....we're still talking about economics right?

[hardikmuley]

Wrong. Marginal cost curve is downward sloping. It's stupid to run an oil well above its rated speed. What we can do is install two oil wells to produce more oil. More quantity we produce more profit margin we get. This is because, mass production machines produce more quantity per unit labour, we get huge discounts on purchase of raw materials in bulk, human resource is optimally utilized for example, maintenance engineers and accountants are mostly sitting idle in small industries. The minimum quantity above which the business starts profiting is known as break even point. Above that, the more quantity you produce more is the profit margin.

[sharongrob]

I hate this. It is patronising and irritating. I know small children that would be offended by their tone and stupid childish effects. Awful.