ECON danna kollo mehe warella... HELP

[Mal Aiyya]

This is the reason why output is given in units, and there is no practical point in between.

 

[Pathum_madu]

හරි දැන් කට්ටිය මෙතන මරා ගන්නවනේ??

Total Cost = Q^2 - 4Q + 214 කියමුකෝ,,
Total Revenue = 4Q^2 - 40Q +400 කියමුකෝ,,

කියමු බලන්න ලාභ උපරිම වෙන අවස්ථාවේදී නිෂ්පාදනය කීයද කියලා (Q)...???
හරිම ලේසියි හොඳේ...

 

[Tom Riddle]

Its like this, if this production function was linear, then we would have got the MC exactly because it is the same at every point. When you differentiate and get a value, it is the difference from 9.999999999999.... to the 10th point. That is mathematically therefore correct. But in economics, businessemen need change from unit to unit as there is no part of a unit produced or anything. So our method of finding MC is from the 9th to 10th unit Only.

The method that gives us 409 is known as mid-point formula method, where we simply find the linear change from two distant points, but when you draw a curve, the change to the 10th point is not from 9, but from 9.9999999999...(recurring); this method is known as Arc gradient.

Get it?

Agreed. But you are in effect paraphrasing what I said. Look in the previous post where I said that it would be more practical to define MC as the increase in cost for 1 unit of extra production.

But the fact remains that some bright brainy guy somewhere has seen it fit to DEFINE MC as d(TC)/dQ, or rather as the partial derivative of TC w.r.t Q. I don't know why that is, and I never pretended that I did. Like you, it seems worthless to me. But if we go by that definition (which you may not approve of, but there may be underlying reasons for this approach which are perfectly valid), then the answer is 434

But of course, if I was calculating this for MY business, I'd ditch all the Ds and daabas and go with the intuitive, practical method.

So practically MC = 409
Rigorous theoretical 'by the book' MC = 434

 

[Mal Aiyya]

හරි දැන් කට්ටිය මෙතන මරා ගන්නවනේ??

Total Cost = Q^2 - 4Q + 214 කියමුකෝ,,
Total Revenue = 4Q^2 - 40Q +400 කියමුකෝ,,

කියමු බලන්න ලාභ උපරිම වෙන අවස්ථාවේදී නිෂ්පාදනය කීයද කියලා (Q)...???
හරිම ලේසියි හොඳේ...

Q = 6

MR = Mc profit maximizing condition. Ow ,mewwa ta differentiation one.

Econometrix karana porawal aduy ban

 

[Tom Riddle]

හරි දැන් කට්ටිය මෙතන මරා ගන්නවනේ??

Total Cost = Q^2 - 4Q + 214 කියමුකෝ,,
Total Revenue = 4Q^2 - 40Q +400 කියමුකෝ,,

කියමු බලන්න ලාභ උපරිම වෙන අවස්ථාවේදී නිෂ්පාදනය කීයද කියලා (Q)...???
හරිම ලේසියි හොඳේ...

Ah meka wenna athi ara differentiation definition eka daala thiyenne.


Ans is MC = d(TC) / dQ = 2Q - 4

MR = d(TR)/dQ = 8Q - 40

For profit to be maximised MR = MC

So 8Q - 40 = 2Q - 4
Q = 6

 

[Mal Aiyya]

Agreed. But you are in effect paraphrasing what I said. Look in the previous post where I said that it would be more practical to define MC as the increase in cost for 1 unit of extra production.

But the fact remains that some bright brainy guy somewhere has seen it fit to DEFINE MC as d(TC)/dQ, or rather as the partial derivative of TC w.r.t Q. I don't know why that is, and I never pretended that I did. Like you, it seems worthless to me. But if we go by that definition (which you may not approve of, but there may be underlying reasons for this approach which are perfectly valid), then the answer is 434

But of course, if I was calculating this for MY business, I'd ditch all the Ds and daabas and go with the intuitive, practical method.

So practically MC = 409
Rigorous theoretical 'by the book' MC = 434

Hahaha...

Well, I've known this proverb which sounds something like this: Once you try to complicate things too much, you end up fooled.

Well, so far in my studies, I've never seen MC nor MR defined in terms of differential derivatives. Most of these statistical generalized models that we use such as differentiation. integration etc. do not perfectly suit a business context, as we deal with practical examples, and a practical approach to anything is not that very difficult nor does it bring upon a rather impossible answer at any time.

How I've known to find MC is through the simple logical concept of the extra cost of producing one extra unit ; the association of mathematics would be appropriate when there seems no other practical experience but simple foreseen figures.

PS : My intention behind "paraphrasing" you was to ring some bells to say we have to seek a way to incorporate business sense into these sums, and I did not brag on it, because I knew you already had this in mind

 

[Tom Riddle]

Hahaha...

Well, I've known this proverb which sounds something like this: Once you try to complicate things too much, you end up fooled.

Well, so far in my studies, I've never seen MC nor MR defined in terms of differential derivatives. Most of these statistical generalized models that we use such as differentiation. integration etc. do not perfectly suit a business context, as we deal with practical examples, and a practical approach to anything is not that very difficult nor does it bring upon a rather impossible answer at any time.

How I've known to find MC is through the simple logical concept of the extra cost of producing one extra unit ; the association of mathematics would be appropriate when there seems no other practical experience but simple foreseen figures.

PS : My intention behind "paraphrasing" you was to ring some bells to say we have to seek a way to incorporate business sense into these sums, and I did not brag on it, because I knew you already had this in mind

Well no not really, we haven't ended up being fooled here. We have arrived at two different answers using two different approaches, analysed why there are different and arrived at a valid conclusion. We stand more informed and now have a more comprehensive understanding of the problem, which would not have been the case had we complacently assumed our first answer to be correct and not ventured to get our hands dirty 'complicating' things.

I surmise from your post that you haven't gone through the Wikipedia link I posted, where it clearly defines MC in terms of derivatives, as do some other sites I went through. The simple fact that it has not come up in your studies does not merit it to be summarily dismissed, as you yourself probably realize.

And I have at no point stated or at the very least hinted that you were bragging about anything.

 

[Mal Aiyya]

Well no not really, we haven't ended up being fooled here. We have arrived at two different answers using two different approaches, analysed why there are different and arrived at a valid conclusion. We stand more informed and now have a more comprehensive understanding of the problem, which would not have been the case had we complacently assumed our first answer to be correct and not ventured to get our hands dirty 'complicating' things.

I surmise from your post that you haven't gone through the Wikipedia link I posted, where it clearly defines MC in terms of derivatives, as do some other sites I went through. The simple fact that it has not come up in your studies does not merit it to be summarily dismissed, as you yourself probably realize.

And I have at no point stated or at the very least hinted that you were bragging about anything.

Yes, the more problems and complications you come across, more people get to explore and discover new things, as for myself, I partly knew what this confusion was about, but during my time spent thinking and typing on calculations, explanations, certain new things came upto my mind too.. some not really relevant to what we were discussing tonight.

Well, to confess, I did not follow the link; what I meant to say was that though you blame the subjects to have been artificially complicated without proper application to practical situations, I had this in, in a more simpler and logical way, and I can positively presume that almost all simple muggle classes on this subject put this concept into students' heads in that manner, to be honest, we were lucky to have things the easy way in to form solid foundations for further study. The internet may contain something that has surpassed many levels of study; yet it cannot be guaranteed the best of explanations, I am sure Wikipedia discloses that its data and information is yet open for change as its not sure whether it is correct or the best of detail, right?

Where have I stated that its worth to be rejected because I've never seen it in my subjects?

And I mentioned that I did not brag, because looking at your moanful reply on paraphrasing, I thought you might need that little bit of information too

 

[Tom Riddle]

Only saw it just now. Are you sure the method which uses the linear assumption to get the gradient is called the 'mid-point formula?' The mid point formula I know involves calculating the midpoint of a straight line when the two end points are given.

Something like Mid point = ( (x1 + x2) /2, (y1 + y2)/2)

It's strange someone would choose to name the method of getting the gradient of a straight line the 'mid point formula' as there is already a different formula by the same name and as far as I can see it does not have anything to do with the midpoint.

But then again, maybe I'm wrong.

 

[Mal Aiyya]

Only saw it just now. Are you sure the method which uses the linear assumption to get the gradient is called the 'mid-point formula?' The mid point formula I know involves calculating the midpoint of a straight line when the two end points are given.

Something like Mid point = ( (x1 + x2) /2, (y1 + y2)/2)

It's strange someone would choose to name the method of getting the gradient of a straight line the 'mid point formula' as there is already a different formula by the same name and as far as I can see it does not have anything to do with the midpoint.

But then again, maybe I'm wrong.

No, mid-point formula does involve the use of two points, but takes the linear change. Its a small formula, but I cant find delta signs and all to show you how it works. Do you know how Price Elasticity of demand is calculated? Its the easiest way I can think of right now to show you the difference between Arc elasticity and Mid point formula elasticity

 

[Tom Riddle]

Yes, the more problems and complications you come across, more people get to explore and discover new things, as for myself, I partly knew what this confusion was about, but during my time spent thinking and typing on calculations, explanations, certain new things came upto my mind too.. some not really relevant to what we were discussing tonight.

Well, to confess, I did not follow the link; what I meant to say was that though you blame the subjects to have been artificially complicated without proper application to practical situations, I had this in, in a more simpler and logical way, and I can positively presume that almost all simple muggle classes on this subject put this concept into students' heads in that manner, to be honest, we were lucky to have things the easy way in to form solid foundations for further study. The internet may contain something that has surpassed many levels of study; yet it cannot be guaranteed the best of explanations, I am sure Wikipedia discloses that its data and information is yet open for change as its not sure whether it is correct or the best of detail, right?

Where have I stated that its worth to be rejected because I've never seen it in my subjects?

And I mentioned that I did not brag, because looking at your moanful reply on paraphrasing, I thought you might need that little bit of information too

Here - "Well, so far in my studies, I've never seen MC nor MR defined in terms of differential derivatives." -

Oh dear, I was afraid you'd come up with the 'how can we trust Wikipedia' argument. First, if anyone with lesser knowledge than the both of us wrote the article they would never include a cryptic equation in the definition, no less involving partial derivatives, but would go with the safer 'increase in cost for 1 unit'.

And second, Google is your friend. If you don't trust Wikipedia, try out other sites. These are some I found, there must be many many more.

http://www.econmodel.com/classic/terms/mc.htm
http://www.blc.edu/fac/rbuelow/calc/nt4-7.html
http://answers.yahoo.com/question/index?qid=20090404201542AATP5bA

And really, what are you calling a 'moanful' (is that even a word?) reply? I said you were paraphrasing because that was what you were doing, it was not intended to be an insult. Talking about proverbs, heard the one about the mountain and the molehill?

 

[Tom Riddle]

No, mid-point formula does involve the use of two points, but takes the linear change. Its a small formula, but I cant find delta signs and all to show you how it works. Do you know how Price Elasticity of demand is calculated? Its the easiest way I can think of right now to show you the difference between Arc elasticity and Mid point formula elasticity

Yeah well PED = % in price / % change in quantity demanded , right?

Still don't get why it should involve a mid point

And I found something contradictory in Wikipedia (Wikipedia again, you sigh ) But seriously, it says the differentiation thing is called 'point-price elasticity' and averaging out P and Q (now I could understand that being called mid-point) is called Arc elasticity.

 

[murtaza123]

well your equation looks like a quadratic equation to me..where you will find 2 values for Q..

 

[Tom Riddle]

And the article on Arc elasticity (Wikipedia again) even says 'mid-point arc elasticity'

 

[Mal Aiyya]

Here - "Well, so far in my studies, I've never seen MC nor MR defined in terms of differential derivatives." -

Oh dear, I was afraid you'd come up with the 'how can we trust Wikipedia' argument. First, if anyone with lesser knowledge than the both of us wrote the article they would never include a cryptic equation in the definition, no less involving partial derivatives, but would go with the safer 'increase in cost for 1 unit'.

And second, Google is your friend. If you don't trust Wikipedia, try out other sites. These are some I found, there must be many many more.

http://www.econmodel.com/classic/terms/mc.htm
http://www.blc.edu/fac/rbuelow/calc/nt4-7.html
http://answers.yahoo.com/question/index?qid=20090404201542AATP5bA

And really, what are you calling a 'moanful' (is that even a word?) reply? I said you were paraphrasing because that was what you were doing, it was not intended to be an insult. Talking about proverbs, heard the one about the mountain and the molehill?

Lets not discuss on the reliability of internet information sources, specially when they are not even ours to talk about.Wikipedia might have allowed that definition on its database to preserve its public image of a highly diplomatic and intellectual internet source for absolutely any data, but more complex. Honestly, I sometimes find Wikipedia a thoroughly uncomprehending version of something that I've known earlier, like the very MC example tonight.

And as for that word, its "mournful", and not moanful, I got that one misspelled. My bad. And I think thats the proverb I was looking at, making a mountain out of a molehill

 

[Mal Aiyya]

Yeah well PED = % in price / % change in quantity demanded , right?

Still don't get why it should involve a mid point

And I found something contradictory in Wikipedia (Wikipedia again, you sigh ) But seriously, it says the differentiation thing is called 'point-price elasticity' and averaging out P and Q (now I could understand that being called mid-point) is called Arc elasticity.

No. Dont take the most quickest literal meaning that you see to it. you'll have to see an example of a calculation to really feel how this jargon might've originated.

 

[Mal Aiyya]

well your equation looks like a quadratic equation to me..where you will find 2 values for Q..

It would've been quadratic with two roots if the whole equation was EQUAL to Zero

 

[murtaza123]

Yeah well PED = % in price / % change in quantity demanded , right?

Still don't get why it should involve a mid point

And I found something contradictory in Wikipedia (Wikipedia again, you sigh ) But seriously, it says the differentiation thing is called 'point-price elasticity' and averaging out P and Q (now I could understand that being called mid-point) is called Arc elasticity.

I duno whether its a mistake but the real formula for PED is :

PED = % 'change' in price / % change in quantity demanded.

 

[murtaza123]

It would've been quadratic with two roots if the whole equation was EQUAL to Zero

oh yea thanx for that mate ! =)

i totally forgot abt the zero

 

[Mal Aiyya]

I duno whether its a mistake but the real formula for PED is :

PED = % 'change' in price / % change in quantity demanded.

Ya ya.. its probably a mistake, but not Tom's fault. He gets his facts from the Wikipedia (now you know whome to blame, dont you Lord Voldermorrrt??)