Entry, exit, and supply curves: Constant costs

Note: This is post #45 in a weekly video series on basic microeconomics. Industries that have a flat supply curve are called “constant cost” industries. An example is domain name registration: to increase the supply of domain names, we must only increase the inputs by a negligible amount. Continue Reading...

Entry, exit, and supply curves: Increasing Costs

Note: This is post #44 in a weekly video series on basic microeconomics. As industry’s output increases, what happens to costs? Alex Tabarrok of Marginal Revolution University look at three options: an increasing cost industry, a constant cost industry, and a decreasing cost industry. Continue Reading...

Maximizing profit and the average cost curve

Note: This is post #43 in a weekly video series on basic microeconomics. For companies, being able to predict expected profits—or expected losses—is a very useful tool. In this video by Marginal Revolution University, Alex Tabarrok introduces the third concept you need to maximize profit — average cost. Continue Reading...

Maximizing profit under competition

Note: This is post #42 in a weekly video series on basic microeconomics. In a competitive market, a company can’t control how much they charge for goods and services. So how do firms maximize profits when they don’t control prices? Continue Reading...

Is it cleaner to trade pollution?

Note: This is post #40 in a weekly video series on basic microeconomics. In an effort to reduce pollution, the government tried two policy prescriptions under the Clean Air Act Amendments of 1990, notes Alex Tabarrok of Marginal Revolution University. Continue Reading...

Bees, Pollination, and the Coase Theorem

Note: This is post #39 in a weekly video series on basic microeconomics. In this video by Marginal Revolution University, economist Alex Tabarrok shows how bees and pollination demonstrate the Coase Theorem in action: when transaction costs are low and property rights are clearly defined, private arrangements ensure that the market works even when there are externalities. Continue Reading...

What the flu can teach us about economics

Note: This is post #37 in a weekly video series on basic microeconomics. What can the flu teach us about economics? In this video, Alex Tabarrok of Marginal Revolution University explains how vaccines produce positive externalities that help people stay healthy. Continue Reading...