kinked demand curve theory

[GuestyHD]

Good luck to anyone sitting the Econ3 A2 exam today.

[GuestyHD]

This is the best I have seen this theory explained. Thank you very much.

[rebeccabor]

you have no idea how helpful you're video's are to my friend and i. would just like to say thank you soooo much. you don't understand how appreciative we are, and because of you we have a chance of getting into uni

[Scuttsy123456789]

never understood this until now...thanks!

[Asvel23]

thank you so much ! finally understand why the MR curve is discontinuous ^^

[milesglanfield]

Fantastic video, really helped me for my exams next week. Thanks

[MyMrwrestling]

@milesglanfield same here

ocr exam board?

[milesglanfield]

@MyMrwrestling University module on it

[StarRecords11]

sir, you are a legend.. need i say more?

[panhulio]

Sir, I remember we were watching your videos on our economics lessons back in college. Our teacher was worshiping you ;D you are a Legend ))

[rabiousrobert]

geniouss!! now I can do my work on oligopoly, THANKS

[christacsi]

My Econs paper is tomorrow and I just started revising today... But after watching your videos I feel comfortably prepared for the paper !!

You rock SIr =)))))))

[JSalvador1272]

Thanks, that made a lot of sense

[Muktho]

is the fall in mc 2 to mc 1, because of fall in price, on the diagram there is only one price "P", be helpful if u could relate the discontinuation of ar with the fall in price,,

i know they dont lower the price because there is no incentive, and Mc still =Mr and the quantity the same, and also if u could explain the term "sticky price" tnx Mark.

[pitchayaa]

i reread both my course companions around 5 times and googled this and grilled my friends and was reaching desperation. then i found this video. BAM. enlightenment.

[vgastes]

So would the goal of oligopolistic firms be to minimize their marginal cost? Because won't they have more profit if they can keep their MC as low as possible since P and Q will remain the same???

[PocketJokersdotCom]

@vgastes The kinked demand curve theory assumes that AC = MC. This is becuase the long run AC is l shaped (it does not have a U shape) So yes if MC falls then AC falls which increases profit.

[solomonhaha]

very helpful

thankyou

[debiligor]

So then what impact does the change in MC have on the company if price and output stay the same?

[joemort]

YOUR A GOD! THANKS PHIL HOLDEN

[Diazreta]

The part where the MR curve is vertical where MC is able to rise and not affect Price or Quantity. What is the name of that region? I thought that there was a name for it but I can't remember...

[melizzz07]

Wow well explained!

[zabikadi]

Paj, Where would you add the Average Cost curve here and can this diagram illistrate the net benefit ( consumer & producer Surpluses) ? thanks

[trailerfinance]

i aced my essay question on this topic because of this video. thank you!

[longscope1]

very clear explanation, like it, wise our professor can do the same job

[longscope1]

very clear explanation, like it

[milichicadevojchica]

this is really helping me study for my micro exam..... i feel like exiting stone age for discovering these youtube videos only now :(

thank you!

[summer9380]

I don't understand the first part - what dtermines why it's at price P in the first place? :S

[mysongbook]

@summer9380

noone knows why its at the price P we just assume that it starts there...

[dfadel1]

youre a true legend Phil, thanks!

[GenevieveAmaBarry]

Just did this today and didn't understand it. it makes alot more sense now!!! Thanks

[846524162]

Can' agree more with people here, you explaind everything in 5 minutes, my prof. couldn't in 3 1 hour.

[iscrewedadonkey]

you

are

amazing

thank you so much!!

[tthlo714]

why is the demand curve above the market price elastic and below is inelastic ?

[loverboyblues]

Thank you for this video...i played it atleast 5 times...which i cannot do with my professor thanks again.

[ichariley]

@loverboyblues hahaha.

[rai747]

God Bless You mate

[ksood1]

thankyou so much for posting this - very useful explanation :D

[afewfromdave]

Awesome Vid mate, soooooooooooo helpful. Thanks

[xJ020x]

Thank you so much, been staring at my notes for about 30mins trying to work this out, and you explain it in 4!!!! thank you!

[HECTORtorrez]

Awesome video mate, i'm trying to read my courses prescribed text "Lipczynski et al" and its almost impenetrable to me. You illustrate these concepts in a clear and easy to follow way, for that I am truly grateful.

[Megaindependent09]

Never thought someone could explain this in a few minutes, but makes perfect sense now. Many thanks

[11ilikesoadsowat11]

thanks very much x)

[handsomecosko]

Thank u very much..nie explanation..

[davishkhkhk]

may i ask you something? i got everything except for the part when you explained MR curve. why does it have a vertical line (the discontinuity) in the first place?

and why does it have to twice as steep? is it because it's the marginal revenue is MUCH less than Average revenue?

Please can you answer this question? it will be greatly appreciated.

[davishkhkhk]

why does MC have to be as twice as steep as AR?

just need to make it clear.

[xhappyberryx]

you're better than my eco teacher. -_- he's friggin useless. thanks for your videos seriously, they save my life :D

[loardayilam]

gud teaching skill

[harrisontoone]

thanks again! I have been using these videos throughout my a-levels and i find them very helpful, cheers!

[kuis18]

dude i love you man, thanks to ur well detailed explanations ive been able to maintain the only A grade in my entire Micro economics class man. <33 i love you

[peadermag1]

Good, but flawed. If Demand is inelastic beyond output Q the Marginal Revenue will be negative. The discontinuit would need to be even longer, passing through the quantity axis. The discontinuity in the video shows D being less elastic below P and only becoming inelastic where the MR curve eventually passes through the Q axis.

[chocolatl]

you are really really fantastic; thanks so much!

and if i may say so, i think all your videos generate a large amount of positive externalities (:

[8Julius8]

ahhh..... consumer surplus... lol XD

[pakibuilder]

you made it so easy to understand awesome. regards from pakistan.

[hommesdumonde]

Thanks for posting this video!

[tanyah81]

Thanks Professor! Busy with my MBA and your video clips on economic theories really helped. Keep up the great work!

[dhruvgalgotia]

Greetings from India , you are our GREEK GOD for economics !

[MrImsodrunk]

i hope i'll pass the exam in price theory B

[sanzaidi]

u made it look so simple!!

[onesickbreh]

I've got my units 4 and 5 A2 exams tomorrow, and i feel so much better prepared thanks to your videos. The explanations are so much better than any book's, teacher's or website's ive found.

Thanks, keep it up

[dunsedog]

same situation and i totally agree i wish i had found these earlier a real life saver.

[lexi7716]

We wish you were our professor. So much better. Exam is tomorrow and we have a good feeling thanks to all your videos. Plus you`re funny :) so it´s entertaining to watch! It´s great that you´ve taken the time to do this. It really is helpful!! Thankyouuu

[haz313]

Real asset to those Greek students, Paul =] Keep up the good work.

[pradnya22]

I WISH I CAN DONATE YOU FOR ALL YOUR VIDEO SIR!!!

u really have no idea how this video help us...

[harisahmed90]

God bless u , you have no idea how much your videos are helping us..

[petermccann2004]

you are very welcome my good man

[yaz504]

thankyou for this video.. you make it sound so simple!

[RUwatchingClosley]

It makes so much sense when you explain it! Thanks so much for posting this. It was immeasurably helpful!

[ocean5281]

Thanks a lot!! I'm going to beat AP economics this May!!!

[hellokhris]

you explained in 5 mins what my prof could not explain in 1 hour.

[MattyB615]

Yeah I second that!

[gummysanta]

@hellokhris i spent 2 hours baffled in class lol

[hpaliyah]

I really hope that you are getting something in return for making these amazing videos. I truly appreciate your help. You techniques and explanations are perfect. Please continue to make these excellent vids.

[Alirazaarian]

Mr Holden, I'm very thankful to u. Your lectures helped me a lot during preparation 4 my examination. Ur knowledge and communication skills r perfect. plz upload some more of ur lectures on microeconomics.

Ali,

Karachi (Pakistan)

[joeyproudmore]

nice 1 mate

[hjastroi]

sexy fucking bugger

[hormar00]

thanks very much, very clearly explained

[saltyseaweed123]

thank you mate. I have an exam later and youve helped me LOADS.

Cheers.

[E3tiger]

Great Vid! It looked like you were ready to knock the shit out of the people making a noise at the end when you said stop lol. H

[Crankelicious]

Thanks a lot, this is so helpfull

[niranjankhiwasara]

Thanks a lot...it has cleared and made the concept more easire to understand...

Thanks a ton

[clareo2]

Absolutely brilliant video, you should get some sort of humanitarian award for helping students :D

[bandehali]

I'm really very thankful to u that, u put these video here , and i have an exam day after tomorrow. I feel very confident myself after watching these videos...thanks very much PAJHOLDEN

[anhle84]

thanks. i helps me alot

[redreaper123]

really really good video.

helped me to understand this idea a lot!

[jaskaren25]

ur videos are amazin..saves time

[renaissancesun]

Again. Thank you for posting videos. I think I actually understand this in more depth than my professor went into, and I didn't understand it at all after that class period. And listening to it with the accent (I am American) made it even more enjoyable.

[teeaxjay]

I think these videos are brillant. Anyway i feel that perhaps the limitations of the kinked demand curve can be mentioned as well.

[jambowowow]

wow...that was practically brilliant haha

thanks for the help!

[metallic21]

Wow this is very clear. Thanks!

I never thought of MR being twice as steep as AR explaining the vertical bit in the MR curve.

[buddbb]

its awesome!!!!!!!! when i looked at my CFA level1 text book... i get totally confused!!!

but u explained like , divide it into 2 parts.. the freaky MRs work out! i understand why MR looks like that now.. thank you so much! i love u.

[miebakso]

totaly help me out with my eco hw. i missed my lec and this just totaly saved 2 hour of lec. lol

[jedideath]

I have seen myriad videos on youtube, and this is the first time I am commenting on one.  That being said; I missed the day of class when my professor went over oligopolies and you just explained it very clearly and have effectively saved my ass on my final. much appreciated. =)

[mylatestaccount]

what if the MC doesnt cut at the discontinuity part??

[pajholden]

It does. The discontinuity is directly below the kink in the AR/D curve. And that is the point at which the market is - at price P where there is nothing to be gained from either raising or lowering price. What is not explained is why the kink is exactly at that P and not another.

[10000maj]

@pajholden thxxxxxxxxxxx

[junniejunjun]

hey i am still confused here sorry, wat is the MR at P, kos MC cuts nothing at that point :/

[pajholden]

The MC cuts the vertical discontinuity of the MR curve - so it is still MC=MR and therefore profit maximisation. The MR is strange but consistent with the kink in the AR/D curve. The bigger the bend in the AR/D curve, the larger the vertical discontinuity. Phil

[junniejunjun]

hmmm so ultimately we cannot deduce the MR from the kinked demand curve?

this is probably a limitation of the diagram am i correct to say that?

[ukdomi]

that's great, really good explanation

[baboon69pashley]

Thanks very much, youre really helping me with my economics revision!

You are much easier to understand than my lecturer!

[sahooq85]

nice job could u give us something about economies of scope ,invisible hand and law of diminishig returns appreciate it

[tophers402]

thanks alot, big help for my business econ class

[nutz4hs]

thanks for the info, cleared up a lot of work on my final exam.

[fahadtanveer786]

awesome..well cleared things up..plz keep the vids coming...excellent stuff.thanks

[sohrabkhan90]

Thanks, clears a lot of issues up!

[tkdchamp2012]

gd stuff.i knew why price doesnt change (elasticity..not profitable to raise or lower and enter into a price war) but i neva knew why they dont have to enter into a price war since the MR is vertical and change in cost doesnt lead to change in Q or P, explained well! :P

[geraldford13]

I must admit, that was one of the clearest explainations of the kinked demand curve. I really enjoyed watching it and watching you enjoy yourself! Please, make more videos.

[aryaldo]

Thanks alot that was a very clear explanation of the oligopolistic model , i had'nt heard about the second part of why a firm would have to change their price , brilliant stuff! any more plz!?

[vanchoichoi]

awesome.. thank you saved me from my mock tomorrow

[hmmmdo]

i studied this 2 weeks ago

[StephanyKong]

Thank you very much. It was very helpful!

[SoulWander]

thank you

[pajholden]

No, thank you for watching! It's a real pleasure for me when something I set up for my classes, here in Athens, Greece is watched and used by people all over the world.

[brewster71]

@pajholden very very helpful. I am taking a correspondence course and the teacher is just awful. You've saved my hide! Thanks so much.

[hossein8425]

nice...