Level I CFA: Topics in Demand and Supply Analysis-Lecture 3

This is Reading 12 for the 2021 exam.
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[@IFT-CFA]

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[@dheeraj3726]

Best video on this planet in regard to the explanation of graphs!

[@wenbo2011]

TVC-Quantity of Output curve should not have been drawn straight. Neither in reality nor should be in lecture slides. A straight line TVC will lead to constant AVC and ATC.

[@abbiewang6686]

I have a question here. It looks like the profit maximization graphs and the breakeven graphs happen to be the same in this case? Why and how often are they overlapping? I understand these are two different concepts that profit maximization is when MC = MR, and breakeven is ATC = AR.

[@vedantkhaira656]

For shutdown and breakeven point, the cost referred to in breakeven point is TEC or TAC? and for shutdown when you say p < 0, are you referring to normal profit or economic profit or accounting profit?

[@kevinshah8471]

If TVC & TC are straight lines, their equations would be TVC = kQ & TC = kQ+c
which implies-
AVC = TVC/Q = kQ/Q = k (AVC = k --> horizontal straight line instead of the curve in second graph)
ATC = TC/Q = kQ/Q+c/Q = k+c/Q (curve reaching a constant minimum value)
Similar results can be shown for MC as well. The curves in second graph are incorrect wrt the first graph

[@mukhitrakhimov6254]

Hi! I don’t understand how you arrived at the formula for change in total revenue here- 14:37. Book is also not giving much explanation😭😭 Can you clarify?

[@tanjotkaur1202]

can I watch these videos even if I am appearing for Cfa lvl 1 2024

[@asdfasdfwae]

Till last lecture everything was clear now I am unable to get it coz of my non eco background. Can anyone help ,where i can improve my fundamentals from?

[@IFT-CFA]

You can study IFT notes or if you have time, you can read the chapter from CFA Institute Curriculum.
IFT Support Team

[@usmanzahid3711]

Excellent

[@IFT-CFA]

Thank you so much 😀
IFT support team

[@elkyelkyelky]

07:00

[@mepankaj1234]

nice

[@IFT-CFA]

Thanks
IFT support team

[@serena644520]

This is very helpful! just too many concepts are covered in one video.

[@IFT-CFA]

Glad it was helpful!
IFT Support Team

[@jieyang6347]

22:06 error. The ATC=TC/Q, not the sum of TVC and AVC.

[@IFT-CFA]

External: at 22:06 it says, AVC is TVC / Q. while TC is the sum of TFC and TVC.
IFT Support Team

[@liasabrina9836]

@@IFT-CFA error???

[@aaketchaurasia651]

I feel that when ATC is minimized, profit is not maximized however at this point the profit percent is maximized.