Long-run economic profit for perfectly competitive firms | Microeconomics

Long-run economic profit for perfectly competitive firms | Microeconomics | Khan Academy

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5 жыл бұрын

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A firm in a perfectly competitive market might be able to earn economic profit in the short run, but not in the long run. Learn about the process that brings a firm to normal economic profits in this video.
AP(R) Microeconomics on Khan Academy: Microeconomics is the study of individual decisionmakers in an economy, such as people, households, and firms. Learn how markets work, how incentives drive decisionmaking, and how market structure influences market outcomes. We hit the traditional topics from an AP Microeconomics course, including basic economic concepts, markets, production and costs, profit maximization perfect competition, imperfectly competitive market structures, game theory, factor markets, and income inequality.
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Пікірлер: 42

@92Julesrules 3 жыл бұрын

I am from Germany and there is almost no really useful video about that topic in german. But this one is so simple and so easy to understand. I am impressed and thankful for being able to understand another language. Great video, thanks.

@Dnkpy 3 жыл бұрын

Thank you Sal for educating us. Keep up the good work!

@aasthasingh3711 3 жыл бұрын

No matter wherever i go.... This is the only channel where i finally understand everything.

@wrjazziel 3 жыл бұрын

Thanks, really helpful!

@michelleg2901 4 жыл бұрын

wow. beautiful lecture. I don't know how to thank you..

@DanTheStripe 4 жыл бұрын

Incredible video. I always knew that economic profit in a perfectly competitive market went to zero in the long run but never knew why. This explains it bang on. Thank you!

@thinithipalayangoda3730 2 жыл бұрын

so will they never make a profit, if it comes to zero all the time?

@eliopalombi 2 жыл бұрын

@@thinithipalayangoda3730 they will not make economic profits, but they obviously will make accounting profits. Economic profits include opportunity costs, like the value of the next best alternative, in this case the next highest paying job.

@nathaliyaminukshi8630 3 жыл бұрын

thank you for clear explaination

@Mylanyoutubechannel 4 жыл бұрын

lol never understood this until this video. Thank you very Much.

@alannac.7392 4 жыл бұрын

Thank you!

@user-xp4ko2eg8q Ай бұрын

Bro, thanks so much, you use a six minutes video make me understand a theory that uses 7 pages ppt and 30 minutes class time from my teacher. I'm already think about should I join the following classes or just sitting in library and self study.

@_Infocars 2 жыл бұрын

Nicely explained 👍

@Currymuncher6229 6 ай бұрын

Thank you so much. You are life saver

@user-db7qs5sp8s 5 жыл бұрын

Thank you very much

@sonamjyrwa8047 2 жыл бұрын

awesome expalination

@revivingpositive6111 2 жыл бұрын

Thanks

@lizzyberg1082 4 жыл бұрын

best video!

@princekangwa3232 3 жыл бұрын

i wish you were my professor not someone i know at the university of zambia

@victoriaschmidt677 3 жыл бұрын

Love u so much

@aster3080 Жыл бұрын

Why did u set the equilibrium points of the new supply curves with the old demand curve. Eq points are set with a new supply and demand curve

@woddle30 5 жыл бұрын

Hi 💗

@yasmingill9327 Жыл бұрын

2 Questions Is the middle point ("productively efficient") meant to be the breakeven point Is the point of the differences between the point whereby firms make lots of profit and then no profit meant to be representative of the boom and bust cycle?

@H4IF4 3 жыл бұрын

i love you

@saurabhsharma9625 3 жыл бұрын

At minimum ATC economic profit =0, what about Accounting profit ?....If it is different, How can firms calculate the implicit part of opportunity cost which we use calculate economic profit

@thejammer2383 3 жыл бұрын

My question too. Also, how they stay in the market if they are not making any profit economically? I am confused, if you know the answer by now, could you please let me know?

@thejammer2383 3 жыл бұрын

If they make zero economic profit, why do they stay in the market? I mean their average total cost is same as the marginal revenue. What profit do they get?

@md.fahimshahriar725 Жыл бұрын

they get accounting profit..

@kfurgie999 Жыл бұрын

It's not realistic. These models have to exclude certain parts of reality, and are meant to be like a "skeleton" that shows you underlying dynamics. The minimum total cost is going to have to include keeping the capitalist alive, except then, there would be more profit by that capitalist getting a job at the firm. It is like in physics, is there a spherical cow in a frictionless vacuum? No.

@tedmink7568 Ай бұрын

Economic Profit is a theoretical concept. It accounts for both implicit and explicit costs. They still make an accounting profit.

@jaykay121 5 жыл бұрын

Can a monopoly ever achieve productive efficiency??

@hobknockers111 5 жыл бұрын

In reality, firms that are less competitive are unlikely to be producing at the productively efficient point as they are earning supernormal profits and have no need to cut costs. Hope that makes sense 😬

@kumarchandresh4044 4 жыл бұрын

@@hobknockers111 u are right for example monopolies usually tends to restrict output as they earn high profits even if they reduce their output

@kumarchandresh4044 4 жыл бұрын

But monopolies can also benefit from EOS and invest in R&D which could make them more efficient