See, Total Cost has two components, Total Variable Cost (which changes with quantity, or you can say depends upon the quantity), and Total Fixed Cost (which does not depend on the quantity). MC shows the rate of change in TVC, which is to say, how much change we see in cost when one additional quantity is produced. Now if only one quantity is produced, then TVC1 = MC = 25. Now if two quantities are produced, then TVC2 = 25 + MC = 25 + 25 = 50. Similarly, when three units are produced, TVC3 = 50+25=75. So, if total Q quantities are produced, we can write TVCq = MC*Q = 25Q. Now TC = TVC + TFC. Here TFC = 0 Therefore, TC = TVC = 25Q Hope this helps.
Thank you, very helpful. Assuming it's a three-tier question, would Q2 still be the total output or would you use Q3 when calculating the total cost function?
It's crazy how full time professors are unable to explain things as clearly as this. Thank you.
Once again TH-cam clutching with amazing and simple examples
Thank you so much!
@@EconomicsinManyLessons You replied on a 7 year old video what a legend
Spectacular! Thanks Mate! Blessings from Northern Argentina
thank u so much, your videos are very helpful! great for cramming the night before the exam
Thank you SO much!!!!! So helpful in my MBA Econ course!
You are a lifesaver man.
Why is TC = 25Q2 ? I didn't get this point. Thanks anyways for this great video!
See, Total Cost has two components, Total Variable Cost (which changes with quantity, or you can say depends upon the quantity), and Total Fixed Cost (which does not depend on the quantity). MC shows the rate of change in TVC, which is to say, how much change we see in cost when one additional quantity is produced. Now if only one quantity is produced, then TVC1 = MC = 25. Now if two quantities are produced, then TVC2 = 25 + MC = 25 + 25 = 50. Similarly, when three units are produced, TVC3 = 50+25=75. So, if total Q quantities are produced, we can write TVCq = MC*Q = 25Q.
Now TC = TVC + TFC. Here TFC = 0
Therefore, TC = TVC = 25Q
Hope this helps.
Thank you so much for this ! Very helpful !
Thank you very much for such videos
Fantastic video, cheers!
Thank a lot for this video :)
Thank you, very helpful. Assuming it's a three-tier question, would Q2 still be the total output or would you use Q3 when calculating the total cost function?
q3
if it was 100 - 2Q when you are finding the revenue would it be 200Q - 4Q^2??
I think small correction at 11:25
2Q2 = Q1 + 75
Q2 = 1/2(Q1) + (75/2)
Why marginal cost is constant in block pricing
Guys help, is this first or second price discrimination?
2nd
It's 2 block pricing an imperfect form of price discrimination
2nd price disrimination?
Yes, and here is another example: th-cam.com/video/WJeYu4Xl5bY/w-d-xo.html
why is q2?
oh i got it. as shown in graph, Q2 is actually the total cost, whereas real q2 is Q2-Q1.