Revenue, Profits, and Price: Crash Course Economics #24

How do companies make money? What are profits? Revenues? How are prices set? This week, Jacob and Adriene are talking business. Whether you're selling cars, pizza, or glow sticks, this video has pretty much all the information you need to run a business. Well, not really, but there's a lot of good stuff in here.
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[@szerdrew8034]

This is literally my entire MicroEcon semester. I physically checked every page of my notes, and this is everything.

[@prajwolgyawali6770]

1:25 Accounting Profit (Revenue - Explicit Costs) != Economic Profit (Revenue - Explicit - Implicit(Opportunity Costs) 2:40) Business calculate their potential revenue and their costs production, including implicit costs, to make informed decision. Companies in competitive market do not make much profit (no economic profit) 2:44 Normal Profit - minimum level of economic profit a company needs to stay in business. 3:25 Total Cost = (Variable Costs - 3:51) + (Fixed Costs - 4:00) Average Cost - 4:12 Average costs fall with more units of production. Economies of Scale - 5:20 Profit Maximizing Rule - 6:10 :- Continue to produce until marginal revenue-6:25 is greater than marginal cost-7:15 Law of Diminishing Marginal Returns- 8:05 Sunk Cost - 9:25

[@mothw.9620]

Prajwol Gyawali thank you!! :)

[@TheDuvee6]

I struggle to ignore sunk costs. I can't stop thinking about the money and time wasted. Even for little things like when I bought a pen for an exam and then realising pencils were only allowed

[@rileywilsonepicarcher9995]

Duvee Hie keep the pen for another exam. Sunk costs are not always lost forever, just think of them as potential future investments and try to focus on everything else

[@joecurran2811]

If used that pen again that's not a sunk cost.

[@hoarfyt]

Best crash course ever in my opinion.

[@Pyrrhic.]

+hoarf There is nothing political about microeconomics lol

[@johnvonshepard9373]

+hoarf What happen to John Green and stan?

[@hoarfyt]

+John von Shepard I'm not a 13 year old girl so I don't care about Jhon Green and Stan's subject was not very insteresting in my opinion.

[@robscallon]

Love this channel

[@tvastardev463]

+Rob Scallon you here? wow

[@icameherejusttocomment550]

+fo shizzle I've never found him on one of my subscribed gaming channel.

[@okiwatashi]

Rob Scallon

[@pramodsutar700]

Rob Scallon

[@mahawiryasantoso5689]

Rob Scallon me too.

[@Biscuitsdefortune]

The best part of the blooper at the end is hearing someone saying: «again!»

[@alyssag3301]

I can't even explain how helpful I find these videos! I always watch after I finish reading my chapters from the micro and/or macro book and this really makes things easier to remember. So thankful! :D

[@BartBe]

a young scotchman comes home and says proudly to his father: I saved a lot of money by running behind the bus. "Stupid lad!" his father blurts. "by running behind a taxi, you would have saved a lot more".

[@JonahSteps]

hate to be the guy who doesn't get it lol

[@thabangtukule999]

I don't understand the logic

[@ncedwards1234]

@@thabangtukule999 Running cost $0. For example let's say the bus would cost $2 and the taxi would cost $20. The father is saying that he is "saving" more money when he doesn't ride the taxi than when he doesn't ride the bus. And in the moment you might say the you do save more, but in reality you are spending $0 no matter what you run behind. If you spend $0 either way, there is no actual saving when comparing which vehicle you run behind.

[@anthonyb1391]

Hey Jacob and Andriene, and all of the crash course team, keep up the fantastic work! I love these videos. Not only are they super accurate, but they're so fun to watch. I have a suggestion though. You guys should do another specific, real life example video, like the 2008 financial crisis. I suggest you do one on Standard Oil and John D. You could highlight so many real world econ concepts with Standard Oil and really demonstrate how these concepts matter -- I see that your next video is on monopolies... And Jacob, your side channel is good too, although the way in which the videos are categorized is a bit messy, but that may just be youtube. Awesome work!!

[@UniusProject]

@4:17 “the average cost of producing most things *initially* falls as more is produced” @7:10 “the more you make, each additional unit is *eventually* gonna cost more” I had to write them down side by side to “see” the difference lol!

[@DQINBETWEEN]

Love the last few examples of studying and relationships on sunk costs. I've been kind of struggling to connect Economics with my current life experiences but these two examples make it more relatable and fun! Thanks for sharing the knowledge :)

[@lionsmith3944]

"become an entrepreneur" Establishes tic tac empire at school

[@geeway5923]

you should create a mob, where you're the only one with access to mint related snacks, and if someone doesn't want to pay for their tic tacs or orbit gum, then you hire the school bully and pay him in Altoids, the most valuable mint

[@henriqueschuh4191]

@@geeway5923 lol what the what xD

[@MrKoolDragon]

Thank you Stan for "Breaking it Down!" You're the real MVP!

[@Aaron-gv8nv]

This episode was very detailed and well done, good work :D!

[@DragoniteSpam]

Damn it, Jacob, you weren't supposed to take "Crash" _literally._ -_____________-

[@6otato]

XD

[@Tlactl]

7:21 Behind the left side of the restaurant Spongebob was fueling them with the power of imagination

[@Goabnb94]

One thing you forget - fixed costs are rarely fixed. Rather, they are fixed to a capacity, a stepping cost. If you buy one pizza oven, you might be able to produce 1000 pizzas an hour, that oven is your fixed cost. But your capacity is limited to 1000 pizzas per hour. So you have to buy a second oven later if your demand rises. Fixed costs therefore increase.

[@99thTuesday]

True, but they are these costs are considered Fixed in the Short Run which is where a lot of microeconomics takes place.

[@BloodSprite-tan]

+99thTuesday cost of maintenance is not fixed.

[@saeedbaig4249]

True. I would also add that, in the long run, anything and every thing becomes a variable cost.

[@henryscott487]

yeah your analysis are so true.. when he bought is first oven he was at the short run with a plant size capacity to produce 1000per hour... as the demand increases in the market since the capacity is utilized already the firm needs to vary its capital in order to meet up with his demand... hence the firm is in the Long run and no Longer in the Short run where cost is fixed

[@gaddyman]

I really enjoy this channel. I have been blessed to help it continue by giving towards its future existence. I run a small business, and enjoy somewhat formally learning the thoughts that have enabled myself to grow into the location in life I currently have placed myself. I believe that this kind of resource can help others that have interest in being in business at a "micro" level understand the reasons for their decisions and enforce positive beliefs. Stan and Hank are a blessed to have spawned a maybe over looked, but very useful resource. To every buddy at Crash Course thank you.

[@LoganLovell]

I have an exam in 2 hours LET'S GOOOOOOO

[@kobyqtcohen]

love the channel! cant help but notice that Jacob doesn't blink at all.. Great channel.

[@evancampbell7138]

Excellent video! I am a visual learner so your videos help me tremendously. I will be sure to donate, and keep up the excellent work!

[@paulrandall9818]

Excellent snap shot shows on all economic topics. Although my speciality is not economics, i'm sold immediately each time I watch and want to watch more. You seem to use 5 steps to break down your topic descriptor....Intro, presentation, story, Close and a rehash as a closure for understanding. Great work and please, continue with the mitigation of educational costs by keeping it free!!!!!!!!!!!

[@nakeishaburgess1567]

genuinely helping me so much, right now im doing an extension subject (starting it two years early ) please do more of these !

[@01Evgeny]

Guys you're awesome. Keep doing what you're doing we business students and future economists appreciate it. :D

[@theekshanabandara9293]

Best video ever on cost of production. Thank you so much for creating with magical level of creativity. Adore your work so much 😊❤😘

[@oliviersimard5180]

Great job! It doesn’t profit me anything telling you this ;) your always fun to watch and I learn a lot with you.

[@mehreenm5285]

Love the pictures and examples, they make everything so much easier. Thought bubble is the best!

[@zybermooze]

That was a solid piece of relationship advice.

[@frederickleo2748]

This was a really informative episode. Thanks :)

[@ericwhittaker3570]

This is one of your best episodes. Thanks!

[@TrumpsaTerroristChangeMyMind]

Clifford!! I bought ur app ur the reason I passed macro and micro economics!

[@liaeverdeen7258]

which app

[@tanas2169]

That Life advice at the end hits hard for me:)

[@tiqualarobinson3497]

This could not have been explained any better. Thank you Crash Course!

[@Remaxilhan]

I learnt a great deal from this channel for my final exam. THANK YOU SO MUCH!!

[@Theraot]

The path to CrashCourse Ethics is open

[@DontReadMyNameMarvin]

+Alfonso J. Ramos (theraot) I think they'll take care of it in CC Philosophy, as it is a part of just that. I'd love to see that though.

[@Theraot]

DontReadMyNameMarvin yes, they will cover ethics there, yet ethics is large enough for its own series. It won't surprise me if they skim over it on philosophy. In fact I think that both economy and philosophy are making the case for CrashCourse Ethics.

[@fastlno]

10:35 just the enthousiastic smile on the dude's face. Makes my day

[@misosoupbaby]

I'm in my first year of IB and ur channel helps me go over what i learnt and stuff. I like the tempo of this one and it's really cute too lol Thank u!

[@Darkraisvictim]

TOO MANY COOKS!

[@xddxopkx6148]

+Darkrai's Victum lol

[@triton62674]

+Darkrai's Victum SPOIL THE BROTH

[@PFAlt]

+Darkrai's Victum YOU MUST CONSTRUCT ADDITIONAL PYLONS!

[@tygrande3127]

read that as too many cocks, thanks for the laugh mate!

[@immanuelsugar6209]

@@tygrande3127 same

[@Kattytatty02]

I'm in highschool, and I found this very helpful.

[@luckypebb1e165]

Wow I hated economics last year, and now its my fav Thanks CrashCourse!!

[@liampenny9077]

Jacob's ACDC belt buckle collection is insane.

[@allstar904]

I'm a have to watch this 20 more times. I understand it but then I don't. Lol.

[@badchowdhury]

This channel really helps

[@elviracarmona4108]

I love this channel. It's so useful :)

[@awadz23]

Omg.. love this channel 💗💗💗 i just understand all those theory and law after i start my business.. hahaha

[@shelbiwallace2540]

1. I love this channel. So much. It is such a great concept. 2. I love the little animation Easter eggs! Like at 8:30 with Craig and Hank and John too? I think one is John. I for sure see Craig and Hank!

[@prabhukumarasamy5556]

I would definitely say that basics of my economics learning started right here .👍

[@indubitablyzara]

I appreciate the blooper thrown in at the end. :D

[@holtzfella753]

really nice episode, liked it!

[@TheFireflyGrave]

The notion of opportunity cost might be my favorite in Economics. I think in those terms all the time.

[@franallen4509]

Fantastic! Thank you so much for this....#24

[@mnejc]

Thanks for the course!

[@maxviraj]

Thnks a lot ... ! u guys r really doing a good job ! bless u all :)

[@kalya3ed8761]

2 years later, and I am watching! thanx guys!

[@VendaSoul]

Learned a lot. Thanks crashcourse. :)

[@Masteridea101]

Im loving this channel. Nice production guys.. I will definitely confess in the interview with FOrtune 500.

[@julietamorenomanzo7270]

"AGAIN???" amazing blooper and video, I love this channel.

[@gonzesse1437]

BEST TEACHERS *EVER*!!!

[@sleepycowboy18]

The pizza chef in the pics makes cooking pizza epic 😁

[@dalilmuhammadeiousafxai3013]

thank you sir for helping me in economics

[@lucabush9739]

Favorite crash course!!!!

[@ConradJD777]

6:21 STAN!

[@TASmith10]

Great video! I'm curious, and this may be more of a business question. But, if we continued with the example of that rainbow pizzeria, how would they determine the ideal number of pizzas to make, say per month? What other factors would go into the decision? The size of the town would determine the market size. The number of competitor pizzerias would cut into profits, especially if their pizza were a higher perceived value. location would be a big deal. Then there's the question of over estimating and losing money on ingredients that have to be tossed. And, so far as allure, possibly having long lines and not enough pizza might drive up demand further? How can they manipulate customers to increase sales? I'd love to see a mathematical equation for this.

[@bethanymunday748]

this crash course is gunna help me pass my final!!

[@parvizkhkh]

Hello. Thanks for the great video. I have a question and would be thankful if you help me to figure it out. The website who has lots of online teachers says that the website reached $10k revenue per month. With considering that the website gets 10% of teaching hours as a commission for himself and 90% is for the teacher, what does $10k mean? It means that the website should pay $9k to the teachers or it means that all the $10k is the website commission and they have already payed the teachers fee? Thank you

[@Roxcreek]

that ACDC belt buckle

[@boscomoons7742]

I will surely tell them that it started from here! Thanks a million.

[@herculeskoutalidis1369]

Awesome. Thank you so much :)

[@Nihilnovus]

Been waiting on the monopoly episode since this course started lol

[@luongvu8115]

Amazing video. Thank you very much..

[@ziqianwei7470]

I learnt more in 10 minutes than the past hours!

[@tanyay1073]

That 'Break It Down' tho 😂😂😂

[@KiaraXoXo]

Man I wish they more videos! Lol I have a test soon. Love this channel!! #CollegeStudent 💗

[@thabangtukule999]

I'm going to start using economics in my relationships

[@ramireddyvarun26]

Could you possibly do a short set of videos on basic accounting? :)

[@shad0winfo]

this is the best channel WOWW

[@zubaidi47]

you're great keep going doing this

[@MrTinyWingNerd]

What a kickass belt!

[@TheNefari]

I had a test about it today (still awake so its today :D) for the description part of the single costs, i would have wanted a bit more visualisation, some other kinds of graths for example, because the talk alone doesnt get you to understand things fast enough for a youtube video... just a tip for the future^^

[@JacobAClifford]

+TheNefari We focus on the big picture stuff at Crash Course. If you are interested in learning all the cost curves you can check out my channel

[@tafadzwa_8585]

why were you up at 1 an

[@saeedbaig4249]

Have u never had 2 cram 4 a test?!

[@tafadzwa_8585]

nah i never bother

[@mahawiryasantoso5689]

I love Crash Course.

[@SafadosAteus]

Great video!

[@siddharthmahajan5317]

simply amazing!

[@sinecurve9999]

"It takes a lot to make a stew..."

[@PissedOffGhost]

+sinecurve9999 I was thinking the same, I had to hold myself back from bursting into song.

[@icedragon769]

+sinecurve9999 Which one do you hear in your head? In my head it goes straight to the slowdown near the end when Snarf is crawling on the floor.

[@louisptrvil8338]

sinecurve9999

[@VulturousMe]

9:15 yeah im staying up rn to learn for my exam sobbb

[@reizkianyesaya8727]

Is there are any books you recommend that cover all the materials?

[@gogetitnow2642]

god i was damn hungary watching it and cann,t stay after seeing those pizza,s

[@dni0102]

The profit maximisation point where MC is equal to MR just applies to Monopolies. I think you should explain Perfect compition and for them, is Marginal Cost equals Price (or Demand)

[@3lPaisita]

love you guys!

[@ticalhoun]

You two are so great! Seeing this in 2023 ❤

[@idilabdillahi7686]

Thank you guys sun cost is very new funny word to me but I really understood the meaning

[@lightbox617]

Brilliant and with serious social implications. Why is Hoboken NJ full of bars? because , when the town began to recover, the first people there opened bars around the train terminal. Everyone i=on the East Coast decided to build a bar next to the successful bar and revenue from each went down.

[@sarahlindner8893]

YOU GUYS SHOULD DO ORGANIC CHEMISTRY!! PLEASE HELP

[@Kiaraaa06]

the two girls at 7:49 are definitely ilana and abbi from broad city!!! so cool they made a cameo in this lesson :)

[@SamuelNasta]

Mongols! Mongols everywhere! hahaha

[@poopmeat15]

Binging these before the AP micro exam

[@thecutecat22]

why the video is blurred? But as always, you guys have made another awesome video

[@darthoptinon2888]

I saw your little SpongeBob Squarepants at 7:23 when you said imagination! Very clever :)

[@0ion]

I'm going to use all the information I learn here on MMORPGs. ^_^

[@ejmmail1]

I love this Chanel

[@emericswitchyoureawesomean3658]

Erin Hayes Chanel s a makeup company. You meant ****Channel right?

[@ak7586]

hehe...the boys and girls at 'thought bubble' not at stereotypical, especially the unlikely ending to the clip. love it...