equilibrium in perfect competition

[GuestyHD]

I was told it is costs and output on the axis. Confusing.

[rachmacniven]

Great teacher, got me through my International Baccalaureate and now getting me through my degree! thank you so much, please dont stop! :)

[annie8nicole]

i just love your videos they are so helpful thank u so much :))

[chistorro12]

I think i love you at the moment

[Heavymetalisforlife]

where do you teach?

[1348577]

U said that it was most students found themselves baffled that when the supply increased in the industry, the supply by each firm decreased...Isn't that because new firms have entered the market attracted by the abnormal profit. In this way the suppliers have increased. So if suppliers are increased, then wouldn't it make sense that even if the supply of each individual firms has fallen, overall the supply has increased due to the new firms entrance....

[1348577]

what is the difference between long run equilibrium and short run equilibrium. I know that in the long run equilibrium abnormal profits are impossible in perfectly competitive markets, but is that the only distinguishing feature???

[adijo123]

@abdullah7200

Perhaps you should learn that it is 'economics' first. Just kidding xD. Great videos Sir! I study economics without a teacher or a university too xD

[wldilkooheji]

@pajholden I'm an IB student who was struggling as hell to make it through my 2 years... you came along and now my predicted is a 6! Thank you soo much! You honestly saved my diploma!

[tricky12321]

My teacher would chorepeat them like kp my head of if i said there were 4 rules shes so stubborn she made us ids today untill we remembered them all:

Homogolous goods

Large amount of buyers

Large amount of sellers

No collusion in the market

Perfect knowledge

Freedom on entry and exit

Profit maximisers

[abdullah7200]

studying economy without a teacher and the only teacher i have is Utube

[MrBadman17]

you suck as a teacher go work in mcdonalds.... :)

[hduoawbdo221]

Phil Holden for president :D

[PaddyO2011]

Would it be better to explain this topic by starting with the industry supply and demand curves and then moving to the firm considering the firm is a price taker and doesn't set the price for the industry?

[TheSimplylk]

thanks for the vedio .

Would you kind be able to explan the short run industry supply curve?

[nishu23gupta]

@TheSimplylk u cant spell. its 'video' not 'vedio' haha

[zvichaita]

thank you, well understood. could you please answer this question for me Consider a world with saving and investment. What will be the economic consequences of an improvement in the investment technology.

[teaQ7]

do we consider average variable cost (AVC) or average total cost (ATC) in short-run?

[PocketJokersdotCom]

@teaQ7 Both

A firm will stay in business if its AR > AVC because fixed costs approach 0 as output approaches infinity. That is in every short run time period average fixed costs are being reduced until they reach zero. Thus in the long run AR and AVC are more signifcant.

(In the long run there are no fixed costs though)

[zz87]

Great explanation! Thank You very much!! Will You add more lessons?

[zz87]

Great explanation! Thank You very much!! Will You add some more lessons?

[Jannih1000]

Your videos are brilliant! Thx! Where are you teaching? Need to go there...

[willEH100]

I have an exam tomorrow, its 11 o'clock and this is what the essay section is on, your that man

[krugermark]

Love all of your videos!!!

When you draw the S and D curves for the industry at 2:13, why does the D curve slope? Is it not supposed to remain horizontal for perfect competition? Or by doing so are you saying that an individual firm within an industry cannot set its selling price, but the price for the industry as a whole could vary due to external factors (or if it was a cartel), thus affecting demand?

[chloeetron]

so much help thankss

[EatLotsOfCurry]

If in the long-run, firms are just breaking even, why even stay in business?

[vee968]

You are a legend! Thank you so much.

[hussainkhalid]

u r the best! i am writing from Saudi Arabia...:)

[dara1rock]

8 people don't do economics

[bigmangiff]

I think the internet is a good example of perfect competition.

[bigmangiff]

Can you come to my school to do a talk please? :)

[wrules]

You failed to mention barriers to e xit which is obviously linked into barriers to entry. Thanks for these videoes, everytime a few days before my exams i always go through some of your videos.

[liverpoool4lyf]

I like the potato example ; )

[tyytan]

No, thank YOU, very very helpful!

[lilman613]

saved me from my micro exam!

[yummycookiecake88]

You're the only reason that I'm passing my AP Economics class right now! Thank you so so much!

[BridgetFields]

You have saved me on many many exams. Great understandable teaching method.

[djselcius]

Hey Phil, I have a test tomorrow on perfectly elastic competition and profit maximization etc.

Your video has really cleared things up for me in a concise and easily accessible manner, thank you.

[tpontoh]

Just wanted to mention that there can also be a loss in the short run, when the average cost is bigger than the price.

And I like your explanation, because it involves industry as well whilst during the lessons our teacher in A2 only discussed perfect competition for the firms only. It wasn't new what you have explained, but it allowed me to look at perfect competition from broader perspective.

[uqbe]

Brilliant, mate! Please try to give an advanced explanation in the future if there are any. Thanks, Phil!

[xtita92]

Thank you so much for all you videos, we couldnt understand out teachers explanation today so we had to watch one of your videos to understand!

THANK YOUU!! We love and appreciate your work.. without a doubt you make things understandable and easier!

[Charlieboy4444]

Even my teacher recognises that you're better than he is. At the beginning of every topic, if there's something difficult to explain then he just says "Boys, let's get Big Phil Holden to explain it"

[pajholden]

@Charlieboy4444 Thanks Charlie - say hello to your teacher for me.

[waveboi93]

YOU ARE THE MAN!

[Corba01]

Thanks. Definitely better than my teacher.

[kanhaaamit]

perfect competition is there where free entry and exit of firms

in long run, large number of firms come to produce similar quality of product due to which the profit margin of firms drop due to distribution of their profit margin among new enter firms

due to which to sustain in the economy or to gain profit they shift to some other industry

due to which in one industry large number of firms cant work for long term

[reenz1231]

ive learnt so much from you thanks alot :)

[Stefania2209]

Thanky ou so much, that was really helpful towards my revision on perfect competition and i can remember how to draw all the diagrams from watching this video.

[naveen1987may]

sir, i am sorry to say that but you must see the video of "Apeconreviewer". you can search this video by the name of -Microeconomics of perfect competition Part 1

[seafoampheonix]

Dude this is awesome!!!!!!!

[ratonL]

Finally, I understand thanks to you, you´re very good...MY teacher sucks...

[hwt2009]

what would be useful is a video on the Treasury intragovernmental debt to explain its components and how it is put together

[TheOsoriver]

Man I wish you where a Econ prof here at UC Riverside

[hornedone72]

Outstanding information, and helps with clarity. I use these videos to help me with my own teaching in Econ here in the US. Thank you!

[Tony000888]

Thank you so much for this video, great learning/revision material.

[gazakhstan]

Hello, i have a Unit 3 Edexcel Economics exam a week today, in fact this time next week it will be 15 minutes away :A

But, why is it only in the short run that abnormal profits can be made in PC?

i assume it is the low entry barriers??

[TheMathsstudent]

@gazakhstan no, its only abnormal and subnormal profits can be made in the short run and normal profit in the long run. This is because freedom of entry and exit and perfect knowledge. So that when there is abnormal profits in the market.coz of the Perfect knowledge firms outside the market have the incentive to enter the market to gain these profits. This increase in the supply of the entire industry which forces down price so tht it equals cost-Normal profit.

[TheMathsstudent]

@gazakhstan for subnormal profit, the reverse happens, There is freedom to exit the market and firms see they are making a loss so they leave the market. This forces the supply of the industry down which increases price up so that now in the long run cost =price and normal profits are made. Hope this helped, ive got the same exam next week, good luck dude :D

[gazakhstan]

thank you very much, that clarifys it for me! very good luck to you aswell mate :)

[kylezpottzrap]

i think i get this but i dont know what the mc mc ar lines all stand for???

[thestealthyfox]

MC stands for marginal cost - the cost of each additional unit of output

AC stands for the average cost of each unit of output (average fixed cost + average variable cost)

MR stands for marginal revenue - the amount of revenue gained from each addtional unit of output

AR stands for average revenue

[dreamofswapn]

u r really good

[stillawolf]

thank you teacher :P

[hazyvitals]

You are the best!!! I always watch your videos before my college exams for review and to make sence of things-- Thank you so much from America!!

[madclown16]

abnormal profits = supernormal profits? someone please help me clear up this terminology!! thanks!

[Phraveen]

both r same

[yzhuu]

yeah it is.

[abgjp1]

Yes they are the same.

[sproggdaddy]

you're awesome... :) great teacher/lecturer

[rkhs90]

when you say, individual firms have decreased Q, but the overall industry have increased Q, its not hard to understand as although there is decreased Q, there are more firms in the overall industry therefore increase overall supply (see 5.13 if you dnt know what im talkin about lol)

[5111463]

excellent lecture...extremely helpful

[GIOGS]

MC and AC curves A2 ?!

[fansduke]

thank you so much

[ajlkene]

thanks.... amazing!

[vhoidz]

WOW. You are great.

I hope you continue making these in the future! :D

[genniboo]

great! very concise and straight to the point!

[SomeoneFromOne]

A lot of information, thanks!

The example you chose was very well explained about the tomatoes in Greece - homogenious goods which are completely identical to each other in perfect market.

[worldbasebalIclassic]

thank you so much

[philonaut]

so much better than my teacher, so much better.

[MSUFootballFan]

THANK YOU... Much easier to understand than my Kenyon prof...

[lylylylylylylylyly09]

you are a life saver, thanks a billion=)

[5tarStunna]

thanks, same here, instead of opening a book a came on youtube. i find this more interesting than books

[hpaliyah]

So completely accurate. Amazing video, great teaching methods and explanations.

I am attempting to study for my econ exam and decided to go on you tube instead of opening a book which is a bit lazy on my part. Thank you for making this video.

[cri8tor]

Snap!

I just left a comment asking you to post a vid about this subject and here it is.

Make that another "A" for me next week.

Thank you so much again.

[E3tiger]

Thanks you might just help me get an A in my exam on monday!

[sarahsrevenge]

I knew you wouldn't let me down! This was exactly what I was looking for, thank you!!

[Christupas]

Thank you. That was very informative.

[panamaicanalian]

this is really good review :]

i wanted to share a way to remember that the price curve is the same and MR, D, and AR...MR. DARP. my teacher calls it that and i think it helps...

[phausknecht]

I just wanted to thank you for offering this very informative video... With any luck, I will ace my micro exam tomorrow.

[LBCulhane]

It would be better if he started with the market situation and then bring in the firm. The problem with perfect competition is that it does not exist in the real world - due to the assumption of perfect information and mobility.

[bluewave10]

sweet

[shuangyang66]

i totally suck at micro econs. and i have an exam ina week's time.... do i still have enough time to save myself?

[Poseidon143]

so basically, due to 'no barriers' firms fight all the supernormal profit off? Leaving no supernormal profit to be made in the long run.. yes??

[happylarry]

because of perfect knowledge a firm cannot sustain abnormal profit since a firm could just implement what ever advantage the firm has to their own firm.

[EconAlannah]

This is the first time I've logged on to YouTube and found an econ video instead of some kind of soft porn as the "video being watched." Mr. Holden's lectures are great; I link to them for my online micro principles course.

[XpsychotikX]

This is very helpful..

however I still have a question..

What is the exact reason for the quantity of each firm falling where as the whole industry's quantity increases?

Is it just that since more entrants are there so that explains the increase in qty where are the erosion of profits caused the qty to fall for a firm?

Please reply

Thanks again

[EconAlannah]

Where he starts out, the firms are on the upward-sloping portion of the ATC curve; that is, they are straining capacity. If the technology stays the same, the efficient plant size stays the same, so yes -- they go to an output size that fits their plant size. They don't want to, but they're forced to by the increased competition.

[CzarneLiryki]

hi

is there any chance that you will soon make video on asymetric information ?

[Pranikki1]

Is this AS or A2 Economics?

[happylarry]

A2.........