Privatisation - A theoretical understanding behind privatisation and why governments look to privatise industries. Exam technique included
Пікірлер: 76
@EconplusDal10 жыл бұрын
You are correct - this diagram is purely a representation of moving towards competitive outcomes. You will most certainly be credited highly in an exam if you explain the diagram as I have in the video
@amankataria19979 жыл бұрын
***** Sir, in contestable markets, they say price tends to normal profits where AR=AC. Given that this resembles perfect competition too (operating at normal profits), would it be applicable to draw the diagram where Pc and Qc equal to AC instead?
@aaryan5675 жыл бұрын
who else is here after the 2019 prediction video
@emilyyi22505 жыл бұрын
YOU ARE A GENIUS. CAN'T THANK YOU MORE. SERIOUSLY BRO.
@ryano699Ай бұрын
im a bit confused by the diagram. if firms are trying to profit maximise why are they moving from MR=MC to AR=MC instead of staying at the profit maximising level?
@ma_0288Ай бұрын
They're not trying to profit maximize, due to high competition in the market from more firms entering due to privatisation then to stay competitive they are going to be producing the allocative efficient point which is AR=MC so they have reduced price and increase quantity.
@ryano699Ай бұрын
@@ma_0288 makes sense, thank you
@YJ-7Ай бұрын
@@ma_0288 yep, are you prepared for the test tomorrow ? (If u are taking it)
@RhysWalters-sv3gcАй бұрын
@@ma_0288 why would it be a movement from profit max at MC=MR to competitive when governments dont profit maximise, surely they wouldnt produce there
@SouthsideShawty2 жыл бұрын
Soft gentle voice
@dbrk9179 жыл бұрын
Why is it that you represent a nationalised firm profit maximising? Just out of curiosity, thanks in advance
@samwalt1239 жыл бұрын
Hi, with privatisation, is there a chance of reorganisation within the firm?
@benjennings7489 жыл бұрын
I have so many wants (I suppose they are unlimited..) one of which is a video on integrated transport policy. The OCR A2 text book is pretty bad in my opinion in this area of Transport Economics and I'm sure all A2 Transport economists would be even more grateful, but then again that is quite impossible :)
@xplane2 Жыл бұрын
Super useful. Thank you mate
@anishparpani71698 жыл бұрын
Hi, i had a question regarding the diagram to draw in an essay if it asked "has rail privatisation been successful." Would I draw a Perfect competition diagram as that was the aim (increase competition) and how would I explain that? Or would i draw a monopoly diagram as that is in fact what happened with the formation of rail track? Thank you for your videos!
@RU1N3D.4 ай бұрын
no you probably wouldn't
@joshuaappiah31317 жыл бұрын
Hi, you are the specialist here and I am just curious about something. You say that the triangle is the gain in consumer surplus. But is the gain in consumer surplus not the triangle plus the rectangle to the left of it? Thanks, Josh
@jason-os3jg5 жыл бұрын
I think he meant a gain in consumer welfare, as the triangle was previously a deadweight loss of welfare. but you are right regarding the gain inconsumer surplus, it is also the rectangle + triangle.
@mayixb4 жыл бұрын
Hi @EconplusDal, I’m a little confused why the diagram you have drawn would not be the other way? As surely when a state firm is privatised it is likely to become a monopoly whilst a state run company looking to maximise social welfare will produce where MC=AR?
@star18474 жыл бұрын
Actually, when an industry is state run it is more likely to be dominant and therefore a lack of competition which may lead to a more monopoly approach, whereas for a privatised org there is more competition. However I dont get why the diagram is shifted to a position of resource allocation??
@DameTime13 Жыл бұрын
@@star1847 exactly! Im so confused Ive always thought that private firms were profit maximisers and nationalised firms are allocatively efficient
@will8387 Жыл бұрын
@@DameTime13 nationalised firms are allocatively efficient so im not sure why hes drawn it as a profit maximiser. And the reason that when its privatised there is allocative efficiency is because you get competitive outcomes where MC=AR (becasue MC=Supply and AR=Demand)
@aizazaheer89955 жыл бұрын
I am doing foundation year by NCUK in UK. do I need to work according to your 2019 prediction video. will those suggestion work for NCUK?
@allislapbarri7 жыл бұрын
can the lack of competition be blamed on some firms inheriting a natural monopoly??
@xPSG19 жыл бұрын
Hi, quick question. When drawing the cost and revenue diagram, when should you have the min point of the AC curve at MC=MR? I understand the min point is productive efficiency, but I'm confused as to why sometimes the min point passes through MC=MR and sometimes it doesn't. Cheers.
@xPSG19 жыл бұрын
Also sorry, why does the firm when privatised switch to producing at P=MC, if the private firm will be profit maximising? Should it not carry on production at MC=MR? Thanks again!
@nzvplc9 жыл бұрын
xPSG1 If it was just sold off to the private firm then yes it would keep producing at MC=MR. However the idea is that once it's sold off, competition increases and other firms enter the market (as they're now competing with this one firm and not the entire government). So, the industry moves towards the more competitive price where P=MC and only normal profits are being made. That's why one of the 'Depends on' points was whether firms actually flock to enter the industry. That's how I understand it anyway lol.
@nas43316 жыл бұрын
Neeor not necessarily your right for most of it but firms are not making normal profit and P=MC they make normal profit when AR=AC
@finntribe10 жыл бұрын
Thank you mate
@dalma.peller2 ай бұрын
Hey sir, I was just wondering how do you show the Deadweight loss before moving to competitive outcomes?
@ric6383 Жыл бұрын
Many thanks.
@marlinjokondo45842 жыл бұрын
Thank you so much l have present ions tomorrow about privatization and this really help me may God bless you
@chrisnorris13832 жыл бұрын
hope your present ions went well
@rezaulnaim2 жыл бұрын
I am here one day before my economics o level exam 🙃 . I am learning new things.
@abdirahmanmumin Жыл бұрын
What did u get
@rezaulnaim Жыл бұрын
@@abdirahmanmumin I Got 'B'
@princessdani7725 Жыл бұрын
When did you start revising and is it too late in your opinion
@cgo5161 Жыл бұрын
@@princessdani7725 start asap
@humaraja425310 жыл бұрын
Hi, Your videos are really helpful. Can you do some videos for global economy? e.g. Latvia internal devaluation
@nicoleandrew80802 жыл бұрын
very helpful video
@harsh08119 жыл бұрын
Thank you
@antisocialbarbie1587 Жыл бұрын
Thank you sir love you
@PeterHYLA10 жыл бұрын
Hi, Privatisation is transferring a public asset into the private sector so it was initially run by the government right? Wouldn't it have already been allocatively efficient under state control?
@EconplusDal10 жыл бұрын
Yes you would expect this but there is room for even greater gains in allocative efficiency for private firms who can reduce costs and prices more than nationalised firms can (the profit motive incentive). As a result prices tend to be lower and quantities produced tend be higher hence further gains in allocative efficiency...assuming privatisation leads to competitive outcomes
@PeterHYLA10 жыл бұрын
Alright I see! I'm enjoying your videos, thank you for making them!
@GTFORDMAN9 жыл бұрын
***** reducing costs by a private corporation usually means reducing services (if allowed) or by reducing the quality of those services through various means like out sourcing to cheaper & less skilled overseas workers - both of which hurts a nation. Government run utility's are far more stable, the services are still payed for by the public individual but are also subsidized by a nations taxes keeping the costs down the money comes back through a healthy GDP created by affordability & Stability.
@lctmslctms10 жыл бұрын
Hi, your videos are amazing and really helpful. I got a question wanna ask. For the diagram you had mentioned at the very begging, I'm wondering whether or not it is a valid comparison of privatization. Since the first price level is set under the the assumption of profit maximization which is not the objective of a government owned department( perhaps AR=AC). I can understand you want to show us the idea in which by the process of privatization, it will increase the quantity and lower the price level. But just my curiosity. Please point out any mistake that I have made in this question, thank you.
@ron37992 жыл бұрын
had the same question icl
@UnsolicitedCoaching2 жыл бұрын
@@ron3799 8 years later same here
@ron37992 жыл бұрын
@@UnsolicitedCoaching HOWS YOUR REVISION MAN
@jargent48332 жыл бұрын
@@UnsolicitedCoaching same lol
@UnsolicitedCoaching2 жыл бұрын
@@ron3799 lol it's hard bro I only need a B but I'm trying to get the best grade I can - I spent so much time on my medicine application and preparing for my interviews and I got an offer of BBB thank god but I got so behind on my revision so now I'm really panicking but paper 1 should be ok. What about you man?
@georgelewis71582 жыл бұрын
@1:30 surely, pre privatisation, the firm would be producing at the socially optimum level of output where mc = p?
@Sophie-uc1et2 жыл бұрын
Refer to pre privatisation as a state run monopoly and thus, produces at PmQm Hope that helps George!
@shtutoring Жыл бұрын
W live stream
@ismailhussain76799 жыл бұрын
Why will there be a loss of economies of scale if a natural monopoly was to be privatised? Also could you give an example please.
@RU1N3D.4 ай бұрын
likely to be split up into smaller companies, bit late but hopefully helps
@MC10W2 ай бұрын
WHT ABOUT -- productive efficiencvy??
@henryfarrer83376 жыл бұрын
Why is there an increase in competition in market due to privatisation?
@henryfarrer83376 жыл бұрын
a.k.a why do economists assume that firms flock the market that has been privatised?
@iMusicalNotez6 жыл бұрын
Idk if this is too late, but there's an increase in competition due to deregulation e.g. removal of barriers to entry.
@dramemah28156 жыл бұрын
Hi, have you got any videos on labour markets please?
@KIRAN5P6 жыл бұрын
Yh he's got a whole playlist on it Labour Market, Distribution of Income/Wealth and Poverty - Year 2 A Level: kzbin.info/aero/PLWeicFreBUYCs7NjXgFhQpoEDvnryFip2
@stephencastillo3 жыл бұрын
@@KIRAN5P ty
@Ronriko12 жыл бұрын
The argument that private corporations will be forced to run efficiently to guarantee profit is false. They would love to obtain greater profit as less cost, who wouldn't want that.
@sumaiyatamima91153 жыл бұрын
2021 anyone?
@terencewinters21543 күн бұрын
And corruption and bribery will inhibit regulators and taxation.