good egg alert watts welcome to lesson number 69 from one of my textbooks the distinction about student Quechua right we have grade 11 and 13 right in this lesson I'm going to introduce a new topic and if you check here we completed a mature market so now we're moving on to dynamics of imperfect markets once you done with this recording we attended micro economics all right we imperfect market we have to be 3d I can say types of market structures name we have monopoly we have oligopoly we have monopolistic alright so in a monopoly yeah if I can just summarize the main differences between the three in a monopoly we have one seller selling a unique product in monopolistic we have many sellers selling differentiated products in one company we have few firms selling a homogeneous or heterogeneous depending on the type of oligopoly all right let's start with cost and revenue curves so I'm going to start with the cost curves but there's a table you'll see shortly in that table we quantity fixed cost and so on so Platte City is the number of units produced like from zero going upwards and then fixed cost is the cost that doesn't change we have done it when we did dynamic of perfect markets very proposed is the course that changes as output increases or decreases we use more petrol when we drive home or something like that and when we don't try to use zero but with fixed cost if you are renting a car let's say for the proper business and the owner of the car was two thousand a week that two thousand ran is your fifth quest but depending on the requests for that particular week you could have more requests so in that week you are going to use more petrol so that's if you stand in Spain spend most of your week sick and you at home then you are going to use less petrol or not together right so total cost is fixed plaster so you can see here I mentioned it before but clearly you can see that if fixed cost is a combination of these two so X course will always be at least equal or more it will never be less than an FEC or what I mean is if this is ten Tarak was this ten do you see that our total cost will be equal to our fixed question but if this is 10 this is five this one is 15 so do you see 15 is greater than 5 and greater than 10 so our total cost will always if we see that curve like on the cuffs you will see mainly the AC because the total cost we divided by the quantity so we've nominee draw the AC curve and you always see you sometimes see a variable cost curve when you want to explain shutting down and so on so this will always be below to this work because of what is explained and our average cost is our total cost divided by delta T and our marginal cost is the cost incurred for producing one additional unit so if we produce 10 units and let's say it cost us to rent to produce the tenth unit to produce the 11th unit it costs us a bit more than it did the previous unit let's say to rent one cent the next unit to rent two cents like that so it's the cost incurred for producing one additional unit and when we go to the table that you see why the MC is increasing at that pace right the next one is revenue okay revenue will draw a different table and explaining it but revenue is the money that you get that's your income the network is marginal revenue so much my ribbon is just like mine our cost is the money you get for selling one additional unit here is the cost incurred for producing one additional unit then cost curves it's all of them these ones alright so let's look at the course schedule Yeah right fixed costs might be same it doesn't matter whether you don't produce what we produce you have to pay a fixed amount variable cost it changes and in this case you see it increases each time to produce and extra units now a fixed our total cost is an addition of these two so 50 plus 10 that our 60 day average cost is total cost divided by our quantity so we have 60 divided by 160 65 divided by 230 to like that then our average variable cost we then come to BC we say just valued by that simple 15:12 87.5 then our marginal cost is the change in total cost divided by change in quantity so it's 60 minus 50 does 10 divided by 1 so that's the team here then 65 minus 60 that's what finally okay but let's look at something here let's try to draw these curves I'll draw them in the game look at our fixed cost it's like this fixed cost 50 range throughout them look at our variable cost it's going like this ten fifteen nineteen twenty five thirty you see that like this we see me it's going up look at our total cost it's 50 is sixty like there's 60 65 7 I look at our cost is going up look at our AC now here that's where you will try to if we were to continue you see something here 60 that height drops 30 to 25 18 do you see that it's all flattening here at 16 16 now look here 16 point one seven sixteen point four three so it's now starting to go up if I continued with my numbers you will see a shape like this you see them because here is that's it flatten out and then start going up let's look at our variable cost our variable cost average variable cost sorry this is ten seven six six seven nine you see the shape just like our AC name right yes this look at that shake that's what I'm saying here so here we are seen in a way why is it like that alright then the last one is MC MC might not cost if 10 is 5 X 4 you see that it's it's it's 9 is 13 so our marginal cost curve but imagine our first clip is a bit different let's say start at him it goes to 5 it goes to 4 6 9 13 18 24 do you see why it has such a shame to say 10 5 whatever then that's to go hard that's the reason why I yell debt alright so here I try to use the biggest in that table to construct those but they don't really show the exact shape because of my numbers if I adjust my numbers a bit just oh if I would have a bigger table and more data in the table you will eventually see the ACE is starting to go up and you'll see the MC and what like that okay so if I had more time to just think and come up with the correct number that will give us such a shame it will be nice but the concept has been understood all right then let's go to revenue curves now revenue curve just like coasters we will see more than anything but you will see them going down in a way right so we have first one total revenue it's our average revenue entity average revenue that's our a that our CI provided by our quantity this is a are tight quantity this is CR divided by 20 you see them okay when we multiply with going to see how when we define a coming back to Dana M I explained it already is the money we get for selling one additional unit and let's see the numbers okay this is our quantity 0 1 2 naught and this is our price now do you see that our price is going down 20 1816 so is because of our demand curve in a way and that is our demand curve as we as we produce more we are giving up a few rents so the more we produce the less we have to charge so do you see where I mentioned before that in imperfect market and affirm if they want to try to six and they are currently producing man the only way they can do it is to restrict output and charge you see and make eight so so main in that item skirts you know it if I may say if you make a lot of product and many people are buying them you may want to create shortage and produce less so that that product is cursed and then the price planet so they can restrict output in charge more do you see that as output is less the price they charge is more right then we have our total revenue here it's simply 20 times 5 20 18 times 2 okay so do you see that our total revenue doesn't increase the way it does in perfect because in perfect the price is 20 20 20 throw up so is 20 times 120 20 times 2 2 40 20 times 360 so here it will be 20 40 60 80 like that because the price is the same if you start with 4 4 8 12 16 like that but in this case do you see that our total revenue is increasing but not at the same pace is not saying 20 40 60 same 2036 polychaetes so by here it would have been at 60 already okay the next one is average revenue but with our average revenues we say total revenue divided by quantity so 20 divided by 120 36 we're back to 18 this divided by do you see something our products is the same as our a hub so you'll see when we draw this curve we will see something like this already you can see why I would say that okay because this would be our deep demand curve and this would be our a they are equal now let's look at my now resume the formula we say change in total revenue I change in quantity so constantly change from zero to twenty so you change by 20 divided by 120 it changed from 2013 so it changed by 16 divided by 160 change by 12 divided by 112 like that so what scenario do you see here this one is decreasing to 18 do you see that this is true so if this not decreasing by 18 is decreasing by two but this one is decreasing to type the rate do you see that 20 it decreases by 2 2016 2 increases by 4 it decreases by 2 it decreases by 4 by 2 by 4 by 2 by 4 so what scenario we're going to have in a way if I was to draw a 90 degree like okay a line that will give us a 90 degree angle this part here this part here must be equal to you see because this one is the one that I'm saying it's not it's not constant it's decreasing by 2 right as we increase it decreasing by 2 but this one is easy at a higher rate is decreasing by oh you see so there is to this point here they must be equal this intact there must be equal right and this proves that if you use these numbers and drop it like I did here yeah you see something you see the same line all right so now I've explained it already if you check your total cost our total revenue sorry do you see it's 20 20 36 48 50 60 60 you see 56 so it gives you something like this okay all right look at this product see you can say WOW density this Richmond meets the best the best cocktail why because of the way they make them they try to make them different of course it can be the same it can have the same name but how they meet and how they do it excess they put and they just bring it to you now the secret is they'll bring it to you in such a way that you say wow this is the best I've ever tasted right now you can't really ask them you can ask them how do you make it but they won't tell you I'm trying to get someone here information is incomplete right then you don't really need to know how they make it because you go home and make it yourself in a way let me see so they can have that secret day and if you like the secret if you like the output the way it tastes then you are going to be a lonely old person to them because you are going to them specifically because of the fact that the product is differentiated you see what we're going in this look at these products you can take a sip from this & DEC's and you can tell the difference you see take a sip from these two you can see a difference so this is an example of that kind of a scenario I put them here again these products are differentiated they they all taste the same let me let me just quickly take this opportunity to go back okay I forgot to mention it when we did dynamics of perfect markets but I just wanna show you this example because I put it pictures well we we started this one look at this look at this we have grapes if I take another another punch from another farmer and if you clean like test shape this brand this am same brand let's shake this type of the seed that was used here farmer P can use the same seed and is going to produce the same grapes same same thing look at that apples you see carrots if you if we go to buy the same seed and we go plant we are going to have the same carrots it doesn't matter where we planted look at that bananas don't taste like bananas 24/7 okay but coming back to our lesson right I think basically I'm done with the lesson that reminds me I saw something there so I'm going to complete this lesson with something that I saw so go in bed was a good thing but I'm giving you a woman to graduate fixed cost from variable cost all right they stick with it all right I realized that I didn't give you answers to that test all right so you have written the test now I want you to mark itself and those are the answers so thank you so much across the lesson and finish Maki and I'll see you in the next lesson right