6. Costs

great video! really appreciate how you broke everything down. but honestly, I think the costs presented here might be a bit misleading for some viewers. like, not everyone takes into account hidden fees that can add up. just my two cents!

How can AVC increase if AVC = 5/Q ??? Then it decreases right??

12:06 The Average Variable Cost shouldnt be 5/q it should be 5q, so AVC=5q

50:00
I guess we know the answer now.

The last two minutes of this lecture aged like fine wine.

I love how in Lecture 1 he said he wasn't going to use the board much 'cause he's got bad penmanship but man. Kills a whole stick of chalk every time. :)

Thank you professor

Interesting. Am an applied mathematician, in my 50s, who is just starting to learn about economics. There's an enormous number of (mathematical) assumptions in these equations. Started to work on a proof of when these would fail. In any case, it is very interesting that these equations seem to work as well as they do.

22:05 i guess it is a rectangular hyperbole

will this be ever useful? feel like we're just translating very obvious intuition into math equation.. and make it puzzling by plugging in numbers and do linguistic gymnastics... interested to know how this goes going forward though.

Custo é custo, nada mais do que isso! Prefiro a visão contábil sobre o assunto!

C=rK+wL is generally true because it is a tautology, based on how we define C, r, K, w and L, it is logically impossible to be false. And the further Long-run Cost function is actually decided by how we assume the production function q(K, L) is and the value of w and r. As a teacher, not only do we need to tell students what it is, but more importantly, tell them why it is and the nature of it.

how do you get MC =10q

00:16 Developing a cost curve for producer theory.
02:18 In short run, total costs = fixed costs + variable costs
06:50 Cost function consists of fixed and variable components
09:07 Understanding the relationship between costs and production output
13:29 Marginal cost is influenced by the productivity and wage of workers.
15:58 Considering wages relative to productivity
19:41 Graphical representation of cost and production function
21:30 Tangency of isoquant and iso cost determines optimal mix of capital and labor
25:20 The marginal rate of technical substitution is key for optimizing inputs.
27:27 Optimal amount of machines is half as many as workers due to equal productivity and cost minimization.
32:15 Cost function is derived from production function and input prices.
34:13 Discussing changes in input prices
38:03 Higher wage rates lead to fewer workers and more machines
39:52 Total cost has gone up to 70 from 50 due to higher input prices.
43:21 Long run expansion path determines long run cost curve
45:13 Long run costs are generally lower than short run costs due to optimizing over a longer period.
48:59 Transition to building a larger battery plant for efficient production
50:40 Discussing Costs and Competition

As a teacher i cant believe how much he relies on his notes to teach this.

Watching a lecture for fun should be worrying

27:44 workers or machines?

AVC is 5q not 5/q. This kept me in some confusion. The cost curve graph

As a Biology graduate, I was pleasantly surprised to hear Le Chatelier's principle being mentioned. And yes, it makes perfect sense in this context.

As always, awesome teaching. These students are lucky to have such a passionate teacher.

1:15 Short run cost curves
1:56 --> Variable cost and constant cost
5:06 --> Cost function
8:18 --> marginal and average cost
16:25 Long run cost curves
18:06 --> isocost curves

Can someone pls explain this to me, why it s mentioned that I would buy more workers when its k=1/2L, literally 2 machines equal one worker, I would rather buy machines in that case if I m indifferent and they give the same output?

AVC is 5q sir... It is given as 5/q in the graph

I don’t like how he swears. 😮‍💨

I think　AVC should be 5ｑ、not 5/q

Nice lecture. This math is not too hard, but there is a lot of it. I find math easier to remember if there is conceptual understanding of the underlying principles it is describing.

cost in general you need to revise for micro to understand competition going ahead

00:00 Developing a cost curve for efficient production
05:24 Deriving short-run cost function from production function and prices
11:12 Understanding the relationship between marginal cost and productivity
16:38 Finding the economically efficient combination of labor and capital to produce goods at minimum cost.
21:43 The isoquant curve represents all possible combinations of capital and labor that deliver a given production level.
27:24 Deriving the optimal mix of labor and capital leads to the cost function.
33:14 Deriving cost function from production function and input prices
38:08 The theory behind the minimum wage debate
42:31 Long run expansion path is a long run cost curve
47:30 Optimizing production requires choosing the right sized plant for the production level
Crafted by Merlin AI.

Talking about Elon back when he was a neutral topic lol

Best proffesor ever...very clear with constructive depth demostrations❤💪🙏

I don’t understand, anyone can explain it to me , what’s Q

I think there is a mistake in the computation of AVC, in the first graph, it should be 5q. Anyway, thank you for the lecture!

What if the MP of capital is higher than the MP of labor IN the SHORT RUN , when we can not afford any additional capital because it is fixed in the short run . Then what should we do. What decision should we make

19:32 take notes, here is important.

I absolutely love how he explains the setup and "what we are after with this lecture"

I love this Professor! He speaks well and l understand him ❤!

One of my favourite respected teacher ,and course

I love this Professor's style of teaching. I wish I had him back in college. Can anyone help me when he simplifies the cost function at the 31:22 mark and how he gets to C = 10 times square root of 2 plus Q. I know he made a math mistake so maybe I am missing something. What is the correct simplification when pluggin in r = 10 and and w = 5. Thanks so much!

11:15 slight error in the graph, AVC is 5q not 5/q.

All these theories are nice on paper, rarely in practice. Such practices will never work at a startup when you reduce humans to a number. Perhaps a gaming theory approach to economics will be a better outcome.

Awesome 😎 thanks

great

Dude chill with the random profanity. It's really cringe and distracting. No one thinks you're the cool prof because you swear during lectures.