How Much to Produce? The Story of Marginal Revenue and Marginal Costs

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Instructions: Watch this video about how an apple farmer decides the optimal number of apples to pick. At the end of the video, consider whether or not the government should intervene. Think about which arguments you might make both supporting and disagreeing with the government acting in the market. In 3.2, we will cover specific ways the government might participate in the market.

[@henleytim]

She should allow the public to pick the remaining apples from the top portion of the trees for a slightly cheaper price per apple. That's what is done in Michigan...

[@mattgray3806]

+Tim Henley I was going to say that she should let people pick them if they bring their own ladders. There would be no benefit or detriment to her but people would get those apples. Like you said, she could even charge a small amount per apple and make a little cash!

[@DUFFLEBAG59]

Geeez why does university lecturers make such simple concept so complicated!! Every damn time 🤦‍♂️

[@epignosisrevealed]

Student here!!! Had to watch the video 🙄 But the comments are hilarious 😂 😂

[@nunya1951]

The idea of margin has a different meaning in economics/finance than in normal usage (think of your marginal tax rate). What the marginal cost is the cost of producing one more unit. Same with marginal revenue, it's the revenue of selling one more unit. By producing at the point where you MR=MC then it means you are producing every unit you can produce and still earn a profit.

[@PrinsesseNesrin]

+tony cocker ham thank you!!

[@hectorhernandez-sp1sl]

+tony cockerham your are correct my friend. So basically, the girl Jen, has to ask herself how much time does the pickers will need to collect the top apples, and how much does that cost per man hour. Then, evaluate the marginal cost of selling extra collected apples vs extra paid hours. I am correct?

[@harshini9378]

I got it thanks ☺️

[@huores6678]

but if MR=MC then the profit is 0, i don't understand

[@saucy05]

In order to reduce her cost she should start dating a 7 foot tall guy and make him pick the apples on top.

[@youpedia4614]

🤣🤣🤣🤣🤣🤣🤣🤣🤣

[@esteban-alvino]

It is a great video explaining the concept using apples and labor, MR is constatn which is the price, it will be profitable when Cost is less than it. Thanks

[@shabseth8630]

Nothing should go to waste

[@gasperkosmac7672]

Great example..well,done lads

[@Sonofsol]

how can she maximize profits if the MR=MC? Wouldn't that mean that she makes no profit? If an apple costs 50cents to produce and she sells it for 50cents, she simply breaks even. Am I misunderstanding this in some way?

[@lucasjames844]

+Guermilson Samedi i think what shes trying to say is that if you half 5 into 3 then youre going to find 7. Once you've found that number its best you look for the derivative. This can be found in 60. This is then divided into 4, leaving you with 17. Understand? Please contact me via MSN if you need any further help

[@fredrawllings7650]

Profit = MR=MC OR TR > TCShe is right

[@shumiyao]

Very good example. My experience of playing The Legend of Zelda: Breath of the Wild helped me to understand the video better. You know how tedious it is to harvest apples in the middle or above.

[@harshini9378]

Shake-Shake the tree maybe?

[@efraimshilongo]

Delete now.

[@harshini9378]

@@efraimshilongo bruh can u mind your own business 😑

[@902hater]

If Marginal Revenue = Marginal Cost, does that mean there is no Profit? B/c Revenue = Expense. Or am i thinking it wrong?

[@powerblaze2u]

Its the breaking even point

[@vader4200]

This might be late but i just got into the topic .the thing is when MR >MC then it means that picking up one more apple will generate more profit than cost so you will keep up picking apple until the next apple will cost you same as the revenue MR=MC so you wont pick up that next apple and stay on the same level of production

[@ratanaksenasam2879]

@@vader4200 Does that mean The MR=MC section is the stopping point? So you'll earn profit on the previous, until MR=MC ? Is that what you're saying?

[@vader4200]

@@ratanaksenasam2879 yes When you reach MR=MC point that means you are picking the maximum number of apples that will generate revenue and if you pick on more it will cost u same as revenue so stay on that level that is what mc =mr mean

[@vader4200]

Marginal means the next apple not the current apple you are picking to avoid confusion

[@abdullahhidayat9407]

Can anyone please tell me that what 3 economic questions can be made from this video???

[@thevoiceofpaul]

Dear Hidayat, The three economic questions are universal and not necessarily perculiar to this video. However, below are the three economic questions that would be asked in any business: 1. What to produce? 2. How to produce? 3. For whom to produce? Goodluck!

[@abdullahhidayat9407]

@@thevoiceofpaul thanks a lot brother.

[@genalemania8641]

can someone help me? what is the MC for picking the apples on the highest part of the tree? TIA

[@sarahthekkiniath1320]

She can just pluck it off the tree if the apples are on the lower branches. But if the apples are way at the top, she'll have to arrange a ladder or maybe hire a tall laborer etc. all of which requires additional cost. Now in this process, the revenue generated on 1 apple (marginal revenue) may not cover the marginal cost. (which is now higher due to the additional expenses)

[@sacha-gayblake7750]

I thinks tony got it correct

[@usmanzahid3711]

What happens when marginal revenue Equal marginal cost

[@thechurchoftruth5761]

what the people are forgetting is that if she picks every apple she still earns 20 cents for everyone..regardless of what it cost her to pick the apples..geez people simple math.

[@hectorhernandez-sp1sl]

+The Church of Truth exactly man.

[@mattgray3806]

+The Church of Truth I seriously hope you are not a business owner. The apples at the top cost her $.55 to produce and she can sell them for $.50. That means she loses a nickel for each apple she picks from the top of trees. "geez people simple math"

[@sarabsabkha3093]

@@mattgray3806 If she picks up the ones at the bottom, middle and top, sells them all for 50 cents each. On average she wont be loosing cuz more apples will be sold and ethically she is good to go.

[@nghibluu]

@@sarabsabkha3093 I know what you’re talking about but I think the main problem here is the opportunity costs for her to pick all the apples from the tree to sell. It takes a lot of time and energy that’s why she needs to hire workers, but also if only one person tries to harvest all apples on the tree then some apples might rot while waiting for her to harvest them which is a loss too. Some opportunity costs that might involve in this case are: time, energy, ladders, and possibily doing other things that can help her make even more money.

[@joshua3027]

get the damn apples

[@thoraxurungus]

How do you like those apples!

[@efraimshilongo]

"How do you like them apples" is the correct saying. Delete now.