In this video I explain the three types of, conditions need for third degree price discrimination, the diagrams involved and the advantages and disadvantages of it.
In this video I explain what price discrimination is, the three types that exist, conditions necessary for third degree price discrimination, how the diagrams form and touch on why price discrimination is good for the firm and consumer.
Tuesday, 26 October 2010
Monday, 25 October 2010
Revenue Maximisation
Revenue Maximisation
This is the point where the highest level of revenue (average revenue X quantity) is achieved.
Why do firm revenue maximise?
1. To help fund growth and expansion.
2. To attract top employees by being able to pay them higher wages.
What does the graph look like?
Why MR=0?
1. Because when MR is negative (MR<0) then this brings down total revenue hence we are not achieving the highest level of revenue.
2. Because when MR>0 then there is always room to increase revenue hence we are not achieving the highest level of output.
3. At Qx when MR=0, we are achieving the highest level of revenue as the TR curve shows.
Recap Questions:
1. At what point do we revenue maximise in the short term?
2. What is the formula of total revenue?
3. Give one reason why firms may seek to revenue maximise.
4. What happen when MR<0?
5. What happens when MR>0?
Answers:
1. MR=0
2. Average Revenue X Quantity or Price X Quantity
3. Either to expand or to attract top employees.
4. Total revenue falls
5. Total revenue increases but it does not reach its highest point.
Profit Maximisation
Profit Maximisation
This is the point where the highest level of profit is achieved.
Why do firms profit maximise? [Assume all firms profit maximise unless told]
1. Reward stakeholders (this provides motivation and encouragement for enterprise)
2. To re-invest in Research and Development. This way we can discover new, gain market share and diversify risk.
3. Attract top employees. Profit tends to indicate the level of pay a firm can provide so obviously if it is high all the top professionals will want to work there and firms need that in order to become more efficient.
What does the diagram look like?
This is the point where the highest level of profit is achieved.
Why do firms profit maximise? [Assume all firms profit maximise unless told]
1. Reward stakeholders (this provides motivation and encouragement for enterprise)
2. To re-invest in Research and Development. This way we can discover new, gain market share and diversify risk.
3. Attract top employees. Profit tends to indicate the level of pay a firm can provide so obviously if it is high all the top professionals will want to work there and firms need that in order to become more efficient.
What does the diagram look like?
Why MC=MR?
1. Because if MC>MR then the firm will be making a loss [no profit at all].
2. Because if MR>MC they will be making a profit on that unit but they will still be capable of achieving more till MC=MR which is the limit.
Why the biggest difference between TR and TC?
1. Profit = TR-TC so when TR is at its highest point and TC is at its lowest point the higehst level of profit is achieved.
2. From 0 to Qx the firm is making a loss. From output Qy onwards the firm is again making a loss because of the law of diminishing returns.
3. At Qx and Qy the firm is at break-even points.
Costs, Revenues and Profits - Key Terms + Formulae
In this video I go through the definitions and formulas of the economic key terms total cost, variable cost, fixed cost, average cost,average variable cost, average fixed cost,marginal cost, marginal revenue, total revenue, average revenue, normal profit and supernormal profit.
Virtue Ethics Revision Pack
Virtue Theory Revision Pack by Komilla Chadha
In this video I explore virtue ethics; the agent-centred approach, principles of the theory, eudaimonia, doctrine of the golden mean and modern virtue theory which includes Elizabeth Anscombe, Martha Nussbaum, Alasdair Maclntyre, Philipa Foot, Michael Slote and Ben Franklin.
In this video I explore virtue ethics; the agent-centred approach, principles of the theory, eudaimonia, doctrine of the golden mean and modern virtue theory which includes Elizabeth Anscombe, Martha Nussbaum, Alasdair Maclntyre, Philipa Foot, Michael Slote and Ben Franklin.
Tuesday, 19 October 2010
Whistle Blowing Examples
In this example I want to explore the different forms of whistle blowing. The first and one of the most famous is called the Watergate scandal.
Watergate Scandal ‘Deep Throat’
Watergate scandal refers to the capture of President Nixon’s fraud. Five men were arrested on June the 17th 1972 on the sixth floor of the Watergate hotel building in Washington inside the offices of the Democratic National Committee. The five burglars had $2,300, lock-picking equipment, a walkie talkie, radio scanner, two cameras 40 rolls of unused film, tear-gas guns and bugs. These men were working for the president. The was one of the schemes he used in order to get re-elected.This incident lead to him being the first ever US president to resign as he was not able to cover up the incident because someone with the pseudonym ‘Deep Throat’ whistle blew.Former FBI agent W.Mark helped two reporters Bob Woodward and Carl Bernstein uncover the truth.
The second famous example of whistle blowing is one of Erin Brockovich.
Erin Brockovich was again an American whistle blower. She came to work in a law firm called Masry & Vitiate as a file clerk. Here she discovered medical records which worried her. What she found is that countless number of people who lived around Hinkley in California from 1960s to 1980s had been severely damaged because of the exposure to the chemical Chromium VI. The chemical had leaked into the ground from the Pacific Gas and Electric Company’s compressor station. She started legal case against them in 1993 – another example of whistle blowing.
The last famous example I will discuss in this article is one of Dr David Kelly which didn’t end as happily as the others.
In 2002 the government asked Dr David Kelly a scientist ti check the draft version of a dossier on Weapons of Mass Destruction in preparation for the invasion in Iraq in 2003. He was concerned about the statement that Iraq was capable of firing battlefield biological and chemical weapons within 45 minutes if receiving an order to do so. Subsequently he made journey to Iraq later on that year to inspect two mobile weapon laboratories. He discovered that the statement he was concerned about was actually false and he told a journalist from the Observer that ‘They are not germ warfare. You could not use them for making biological weapons’. In the following years as Kelly spread the word he was given a warning by the Ministry of defence and had to appear before two committees of the House of Commons. Sadly in 2003 when he was working in his home in Oxfordshire he went for a walk and was found dead. They say it was ‘suicide’ – he ‘swallowed 29 Co-proxamol tablets before cutting his left wrist with a knife’.
Whistle blowing in the news – October 2010
Former whistleblower Andrew Wilkie announces his opinion
NHS introducing new ways to make it easy to whistle blow on malpractice
Sacked for whistle blowing Atlas Air
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