Profit maximization | APⓇ Microeconomics | Khan Academy

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Learn about the profit maximization rule, and how to implement this rule in a graph of a perfectly competitive firm, 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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[@mustafaansari7209]

This is sooo interestingly taught! Thanks a lot sir:)

[@tasos499]

Thanks!

[@jonnyschultz2943]

Really helped clarify!

[@nifedavidawosanmi3415]

Comprehensive explanation.

[@sarojhkalyan1527]

Thanks for the video! Really helped me to clarify a doubt I had regarding this.

[@TheRoamingPrepper]

Excellent thanks

[@EJB-jh1gg]

Great video! 😄😄

[@sigiphilip5361]

Super!!!

[@trixxpounce4962]

why did you color the entire rectangle? do you also need to cover the average total costs as well, to earn profit?

[@Piku-lt7sq]

Wowe

[@chittibabu6533]

Superb

[@UFOSgotme]

thanks so much!

[@rossfriedman6570]

Why would the marginal cost ever exceed the marginal revenue? You need to acquire more equipment at that point?

[@marishaghosh6611]

Same question

[@21LeonidasZ]

When MC > MR this means that a factory for example has greater cost of producing something compared with its profits. Think a basic example of labour units. If employing an additional worker is not beneficial for the factory as it raises MC (note that MR is constant in this case), the factory will simply not employ him because if he does, it will have negative profits (meaning it has to shut down).

[@cashreyadas6563]

@@21LeonidasZ Yeah that's a logical explanation. Could also be due to increased material costs. Let's say extracting a particular resource beyond a certain limit leads to excess costs. Though this is a rather specific scenario.

[@mirilondondrift]

decreasing returns to scale

[@LibertyAnd1776]

The curve goes up because once you hire too many workers, every additional worker becomes less productive as they have less to do. When the worker is inefficient but they’re asking for the same wage as the other workers, you end up having to pay more to get an extra unit. This is called “diminishing marginal returns.”

[@nihalv7049]

Pora

[@peaceuchenna1307]

...k.

[@willnaylor8536]

Crazy how you have 4.5 million subscribers but less than 200 views in 2 hours

[@lyn5642]

He's not just talk about one subject. Come on.

[@qasimsheikh9186]

People usually watch videos on thier website, in fact it's not an entertainment video, it's a lecture video for specific topics so everybody isn't going to watch it

[@nhily4757]

I can't stand black board, why dont you try white board?

[@alex-pu6uq]

sal, don't listen to this one.

[@advance6846]

bro dont blind us