I created econhelp with the view to providing intuitive, explanatory videos on a range of undergraduate topics within economics. My channel is still growing, so at the moment I mostly focus on undergraduate microeconomics but hope to extend to macroeconomic and mathematical economics in due course. Please let me know if you would like me to cover any particular topic!
*** I am currently trialling online tutoring, either 1:1 or in small groups - see form on my webpage - www.econhelp.com.au or email me for enquiries if you are interested (econmathhelp@gmail.com) ***
I'm not sure how to think about this is terms of slope. Here's an initial thought: what we want to explain is that the MR is not only less than AR, but increasingly so. This will give us the steeper slope. From this perspective, the answer may well be "because the price decreases": - as we increase quantity, the additional revenue we get from that additional quantity, gets smaller and smaller because the price we get for that additional unit gets smaller and smaller. Thus we get MR steeper (below our demand and increasinly the gap gets wider). Does that help? Another way to think about it is with elasticities and connecting it with the TR curve, but I'm not sure if that helps.
@@econhelp_official okok, thank you. From all the other videos I have watched, they have only proved it mathematically, so I was wandering if there is an actual explanation to it haha.
Yeah it's a good question, I hadn't thought about it in terms of the slope. I think it's really good to see this through the elasticities as well, that gets to the issue in another way. In the top half of the curve we go from perfectly elastic to unit elastic. This means that increasingly, as we decrease the price, the demand gets less responsive to changes in price (quantity does not change so dramatically given a decrease in the price). I'm pretty sure I go through that here: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-uawjookzs4Y.html... So then we link it all to the hump shaped TR curve. Another way to think about it is that MR can't ever be flatter than AR (otherwise at some point MR will become greater than AR, which we know from this video can't be true). So then the question is, why isn't it just the same slope? Well... the price is decreasing. each time we increase q, that part of MR that increases (because we sell one more unit) is getting smaller and smaller (since price decreases) so MR gets smaller more quickly (i.e. it is steep). ... I hope that makes sense, it's actually hard to articulate! :)
Great video but is there a difference between productive efficiency in the long run vs productive efficiency in the short run? Is a firm that produces at the min of srac productively efficient in short run while a firm that produces on any point on lrac is productively efficient in the long run?
Really good question, I find this stuff really difficult. Some texts identify productive efficiency with technical efficiency, some use a broader definition (I think… it’s so confusing), so even on definitions alone I find this area problematic. Best to ask your teacher/ check textbook. In my experience more advanced texts take LR equilibrium to be at min LRAC, and this is what it is to be productively efficient. More beginner texts don’t seem to differentiate between LRAC and SRAC, they just say P= min AC in the LR, and they sometimes say this is productive efficiency… hope this helps, sorry I don’t know the proper answer!
Thank you so much for your content. I am very grateful that you have made these helpful videos that are easy to understand and enable me to grasp complicated concepts. They have been a great aid in my university studies. Keep up the awesome work, thanks again.
Hello! I had a little look at one past paper. I will try to go through some in the future. Thank you for the comment and letting me know about the exam!
Hi @eternallife9301, I had a look at some of the past papers and the questions were very interesting and actually very cool for me to sit down and try to figure out. Because these topics are a bit different from my current library of topics I have videos on, it will take me a little while to get to do videos on them. Unfortunately at the moment I have very little time (I have an energetic toddler) and because of this I'm just doing relatively easy videos that are quick for me. So the videos probably won't be quick enough to be useful for you. Given this though, please feel free to e-mail me (econmathhelp@gmail.com) in the mean time with any specific questions, and I can try to explain things via e-mail. Sorry I couldn't be quicker with the videos!!
Hi. I am from Pakistan and I love your videos and style of explanation. Please be kind to share your email here so I can write to you for some querries. Would be very kind of you.
