Hi Ben. I really love your lectures! This is the best intermediate level Econ course I ever had and I even recommended to my professor! But I am wondering would you mind reorganizing the order of these lectures a little bit if possible? Especially from the producers theory, that’s where the order starts to be confusing. Thank you so much for spending time recoding these amazing lectures!
Great to hear they're helpful! I saw your comment and reordered some of them a little bit. Actually though the ordering matches the way that I structure in class. Definitely though it doesn't quite come through as well in the TH-cam playlist format!
Amazing Lectures Ben, It cleared all my doubts. Thanks. Hope you post such regular videos during this Lock down period all over the World. Love from India.
I'm a bit confused. By introducing the tarrif fee the real per unit price that the consumer is to pay goes up, which should make the demand to go down, decreasing the quantity purchased at MC=P. In other words, in doesn't matter how the consumer is to pay (through tarrif or per unit price). Or is this relevant because the consumer pays the tarrif first and only then gets to pay the per unit price. But if so, why would it agree to pay the tarrif in the first place, knowing the per unit price in advance?
These are very good questions to raise. You're correct that generally the consumer will pay the tariff (fixed price) first. In fact, what makes two-part pricing work is that this is the only way that consumers are able to buy the good. Examples are where the total price is separated into the tariff and per-unit price portions. These are things like printers (tariff) and ink cartridges (per-unit), bulk stores like Costco & BJ's with a membership (tariff) and individually priced items (per-unit).
It very much depends on the specific product or service. However in places where we'd see the two-part pricing scheme it's important that consumers don't have the option to pay simply the single (albeit potentially higher) price. From the firm's perspective the goal is to extra more economic surplus than possible with a single price (the standard MR=MC outcome). From the customer's perspective the choice typically isn't between membership + per unit price versus solely per-unit pricing but rather between membership+price versus not buying at all (so if demand is elastic and there's other options, this pricing scheme doesn't fare very well).
Hi Ben. I really love your lectures! This is the best intermediate level Econ course I ever had and I even recommended to my professor! But I am wondering would you mind reorganizing the order of these lectures a little bit if possible? Especially from the producers theory, that’s where the order starts to be confusing. Thank you so much for spending time recoding these amazing lectures!
Great to hear they're helpful! I saw your comment and reordered some of them a little bit. Actually though the ordering matches the way that I structure in class. Definitely though it doesn't quite come through as well in the TH-cam playlist format!
Amazing Lectures Ben, It cleared all my doubts. Thanks. Hope you post such regular videos during this Lock down period all over the World.
Love from India.
Great to hear, thanks!
I'm a bit confused. By introducing the tarrif fee the real per unit price that the consumer is to pay goes up, which should make the demand to go down, decreasing the quantity purchased at MC=P. In other words, in doesn't matter how the consumer is to pay (through tarrif or per unit price). Or is this relevant because the consumer pays the tarrif first and only then gets to pay the per unit price. But if so, why would it agree to pay the tarrif in the first place, knowing the per unit price in advance?
These are very good questions to raise. You're correct that generally the consumer will pay the tariff (fixed price) first. In fact, what makes two-part pricing work is that this is the only way that consumers are able to buy the good. Examples are where the total price is separated into the tariff and per-unit price portions. These are things like printers (tariff) and ink cartridges (per-unit), bulk stores like Costco & BJ's with a membership (tariff) and individually priced items (per-unit).
I don't understand why a consumer would rather pay a entry fee then just paying a higher price?
It very much depends on the specific product or service. However in places where we'd see the two-part pricing scheme it's important that consumers don't have the option to pay simply the single (albeit potentially higher) price. From the firm's perspective the goal is to extra more economic surplus than possible with a single price (the standard MR=MC outcome). From the customer's perspective the choice typically isn't between membership + per unit price versus solely per-unit pricing but rather between membership+price versus not buying at all (so if demand is elastic and there's other options, this pricing scheme doesn't fare very well).