7. Competition I

MIT 14.01 Principles of Microeconomics, Fall 2018
Instructor: Prof. Jonathan Gruber
View the complete course: ocw.mit.edu/14-01F18
KZbin Playlist: • MIT 14.01 Principles o...
This lecture finishes the discussion about costs from Lecture 6, and then the instructor explains perfect competition and short-run profit maximization.
License: Creative Commons BY-NC-SA
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[@skaslam5408]

These lectures are far better than some Netflix series

[@caratinawaiters2590]

So true!

[@georgen9755]

sk you never ever study MIT , clever fellow cheating nicely , your sister is working in MIT, sai ram engineering college, madha engineering college, Jerusalem engineering college and you are going to coaching class or tuition center ? This looks like your neighbours kitchen room ?? why the hell getting coaching from stupid MIT goons , always indulging in sexual abuse and ..............teaching sex ???

[@user-ur6uw6vn9t]

Why are you stealing stolen comments?

[@spartancocoman]

Th professor is absolutely brilliant, It's so much better than my microeconomics class

[@MdAmjad-yb6rs]

He is from MIT so there will be difference obviously...

[@akarshgupta350]

Us

[@unrulyastronomer6611]

This is a great series! Prof Gruber is hands down my favorite online economics teacher. I noticed an error (at 32:40) that viewers of this video might benefit from seeing corrected: Total profits at the profit-maximizing point (the point where q=3) is 35, not 45. Here's the math: P=R-C= (30q)-(10+5q^2) = (30*3)-(10+5*3^2)=(90)-(10+45)=90-55=35 not 45. So the discrete answer (P=35) is the same as the continuous answer (P=35) that was calculated at 40:05.

[@logeshwaribabu1954]

can someone wxplain how he finds Marginal cost for each unit and can someone explain how the profit is negative 10 for the fourth unit?

[@mercedesgomez8488]

@@logeshwaribabu1954 It negatives because your max point is 30 so if you go produce one more unit, it would cost you 40 and the benefit would be just 30. So you will be losing 10

[@logeshwaribabu1954]

@@mercedesgomez8488 thank you ❤️

[@DavidRotin]

I was so confused on how he got 45 and what discrete something something was lol

[@debarpanmusib9844]

Great course content, Thanks Professor Gruber, and MIT for making this possible!

[@itz_ilyas19]

I never attend any regular class of economics but this lecture series helped me a lot to learn about how it works. . Thanks MIT and Professor Jonathan Gruber.

[@tariqzaghal6698]

professor*😂😂🧡

[@jonny_gage]

This is a good lecture and I'm going to watch it in VR!

[@MajinXarris]

4:27 this one's straight out of theory of poker. The fact that you bet on the flop doesn't mean that you will have to pay to see a turn card if the odds aren't in your favour or someone else is betting heavy. You gotta let of your hand.

[@deilacarolinacastillo3912]

Min 24.35 The best teacher I could have. Never remove these courses

[@krissp8712]

14:00 yay for the last session of this course!

[@ProWhitaker]

Thanks for the video

[@mitocw]

You're welcome :D

[@ObsetanHurisa-hz1ej]

Wonderful lecture

[@RidinCountry]

Wonderful lecture!

[@harshaagarwal206]

As far as I understood the math for calculating the profit at q=3, the cost function 5*3^2+10=55-90=35. I think that 45 is anyways is not the profit even if consider it discrete.

[@logeshwaribabu1954]

can someone wxplain how he finds Marginal cost for each unit and can someone explain how the profit is negative 10 for the fourth unit?

[@DavidRotin]

90-55

[@logeshwaribabu1954]

can someone wxplain how he finds Marginal cost for each unit and can someone explain how the profit is negative 10 for the fourth unit?

[@pran-ker]

What hpns if there are multiple opportunity costs? - Do we take average or - Highest opportunity cost, etc

[@zyne8087]

We take the highest opportunity cost

[@yunusemreyazc6985]

opportunity cost means the next BEST alternative you give up when you make a choice, so there can not be multiple opportunity costs.

[@ryanhayes5475]

@6:10 If Steve Perry can hit that B above middle C in "Don't Stop Believin," you're going.

[@libsby2573]

What is positive competition?

[@ichbinraghu]

Small Correction - Subject is more on the Cost Function rather than Competition, can you rename to Cost Function series . Rest absolutely Sinc with my course .

[@libsby2573]

What is explicit cost

[@zafrulsiddique]

How can a 45 degree demand curve have a constant elasticity of -1? He is confusing slope with elasticity.

[@Ennxi]

sunk costs are well explained and easy, it s just you either get 100 or tickets omit everythin else

[@teachmetelugu7320]

9:00 perfect competiiton conditions

[@pranamihayaran]

At 33:48, how is the marginal cost 40? Since MC = 10 + 5q^2, MC = 10 + 5*4*4 = 90.

[@nabsungkar]

Hi. The marginal cost is the derivative of cost so it would be 10q, hence for the quantity demanded 4, the marginal cost is 40. Hope it helps

[@sahilkushwaha5864]

22:00 ❣️

[@md.samiulalim158]

good

[@uditabhattacharya2824]

28:08 till end as profits per unit needed for visualization DO LECTURE QUESTIONS FIRST

[@jpmcmullan8666]

This guy is nuts, Journey is awesome

[@zhuwenhao4852]

the residual demand notion was wrongly explained. overall good lecture though.

[@leogaussbell1622]

6:40 competition I

[@libsby2573]

Hi, what is positive competition?

[@sitrakamatthieu]

14:39 "Babe ...we need to go to Paris see the Eiffle Tower replicat market!"

[@mertaliyigit3288]

Sooo can somebody explain why they cant do the thing explained in 36:10 ? I'm curious and scared I wont find it in later videos

[@suryavadlamani1896]

This is cartel formation, in practice it definitely happens but the different members of the cartel may start undercutting each other by making deals separately with customers. The best example for this is oil exporting, the product is roughly the same, but oil exporting countries got together and made an organization OPEC to manipulate the price. The professor wanted to discuss this in later lectures I think.

[@lennon_richardson]

🙋‍♂️If the marginal cost to produce the last unit equals the sales price, wouldn’t that unit be sold for zero profit?

[@sriramsriram7631]

Thats the limit like ceeling for how many units a firm should produce if you produce more you will be loosing money if you produces less you are missing the marginal revenue so that's the optimal level

[@lennon_richardson]

@@sriramsriram7631 I understand all that. My question is still unanswered. Say you produce 1000 units. If the cost to produce the last unit equal the sales price then the profit on that unit is zero, correct?. Wouldn’t it be better just to produce 999 units and make a slight profit on the last unit you produce?

[@mooky3494]

@@lennon_richardson Just reading this. Thought Id give my intuition for it: You also do not lose any money by selling the thousandth unit. Total profit would be the exact same for 999 as for 1000 units. You merely sold one more item. So, mathematically, I do not really think it matters. Still, as a producer I would rather also sell the thousandth unit just because I then have higher sales numbers, one more consumer in contact with my goods, etc.

[@syazwaninorizam2226]

I don’t understand much because of the language yet he’s better than my lecturer…

[@MohdAbuNaiyan]

Excellent course but the instructor should slow down we he talks. Regards

[@shortsandquizzes1640]

Zyakhala on loud speaker

[@arinzechukwubuike]

Sunk costs?

[@ac9832]

Costs you have had that you can't get back. You should ignore these and only make decisions based on the future alternatives. He had two alternatives: 1, Go to the consert, something that was wortht 100$. 2, sell the tickets, something he should do if it becomes worth more then alternative 1 (100$+) Hope it helps :)

[@vishavejeetsingh4193]

Split milk

[@muhammadsiddiqui2244]

Sunk Cost Fallacy is a very common logical fallacy people do. It is something very similar to passion or consistency. It is a logic which says that because I have spent on this so I will keep on doing it.

[@ArunKumar-yb2jn]

@@vishavejeetsingh4193 No. It's spilt milk.

[@MajinXarris]

23:30 Did he really call programmers slaves? Am I the only one hearing this

[@ArunKumar-yb2jn]

Let's sue him.

[@bunnyman6321]

@@ArunKumar-yb2jn How you make out?

[@ArunKumar-yb2jn]

@@bunnyman6321 Slavery is illegal.

[@bunnyman6321]

@@ArunKumar-yb2jn Duh

[@awhimdhwani]

His lectures are GRIPPING