Economic MC ( Form 6 level )

(在此只想討論一下, 未必能夠給予閣下確實的解題方法)

關於第一條,

The postulate of convexity can be used to derive a downward sloping demand curve if the utility level is held constant.

據我所知, The postulate of convexity 只代表 Indifference Curve 係 convex to the origin, 之但係要 DERIVE 一條 downward sloping demand curve 係需要 holding real income constant.

單憑 postulate of convexity 而完全不提及 income effect 實在無法 derive 一條必定 downward sloping 的 demand curve.

所以我覺得 C 是錯的.

請問閣下, 這條題目是源自 HKAL 還是學校出的題目呢?

如果是學校題目, 請向老師轉達上述看法, 問他為何可以 ignore income effect 而肯定 postulate of convexity 便成功 derive downward sloping demand curve.

(如果你之後知道答案, 也煩請告訴我)


第二條,

When a price searcher produces an output at which marginal cost is greater that marginal revenue...

作為 price searcher,
profit maximizing output level 當然是 MR = MC

當 MC > MR, 就是說間 firm 不是 maximizing profit.
很簡單, 因為多生產一件貨的額外成本 竟然要貴過賣出去的價錢, 試問 profit maximizing 的你又點會咁做呢.

所以, 最好方法就是減少 production 啦 ^o^

Answer is A.

注意: 間 firm 無 suffer loss, 佢一直都係賺緊錢的, 之不過 production @ MC > MR 會令到賺的錢少咗, i.e. not maximizing profit.

2009-01-02 18:20:43 補充：
首先, 我也謝謝你給我最佳解答.

第一題, 看來我是看漏了 holding utility constant 的 implication =.="
現在我也明白了^^

至於第二題, 我想我們都想得太多了...因為...
Option A 是 he can increase his total revenue by reducing his production.
而不是 he can increase his PROFITS(or WEALTH or ECONOMIC GAIN, you know what I mean) by reducing production.

2009-01-02 19:08:42 補充：
當 price searcher produces at where MC>MR,
它便會 cut production--> 於是price drops.
而 total revenue 上升或下跌就是 depends on the price elasticity of demand 啦~

所以 Option A 是 he can increase his total revenue by reducing his production 便錯了, 因為 total revenue is uncertain.

不知你認同我的看法麼?

2009-01-02 20:31:30 補充：
至於 Option B, 這個我不太慬解釋, 倒是有些疑惑想討論一下.

正如閣下所言, 假如 MC>MR仍然可以maximize wealth的話, 平時果一套係咪有bugs呢?

所以我有理由相信平時所學的一套是沒有 bugs 的, 有的話已經一早要我們讀 Paradox of 甚麼甚麼啦~ MC = MR 理應是真理 for maximization (I mean within AL syllabus)

2009-01-02 20:32:29 補充：
閣下指出, 「一般來說, PS生產到MC=MR, 而MR係D既一半. 即係話, 就算PS因生產過多而導致MC>MR, 市場仍會吸納倒多出黎既貨, 而且Qd>Qs. 」

問題是, 由始至終 price searcher 都沒有 supply curve, 又如何決定 market price 呢?
我們又如何確保市場會吸納倒多出黎既貨呢?

2009-01-02 20:42:33 補充：
「究竟係reduce output定係increase price會帶黎更大既wealth, 我相信係要睇Ed, 只但係我唔知道點樣解釋倒落去.」
我絕對明白閣下的意思, 因為 Ed 的確 affect our analysis a lot.
我也是陷入了這個思想困局 =.="

很對不起, 說了那麼多無謂的意見 -.-

遲來的意見:
Refer to Q2,
首先, 題目的重點是問 price-searcher, 若 choose A, 就未能回應題目要求。從 price-taker 角度看, price-taker can only control the level of output (production), but cannot control the price.
MC=MR is wealth-maximizing level.

2010-01-30 23:35:56 補充：
MC>MR--> price-searcher reduces Q-->MC falls, holding MR constant.
但是, price-searcher can control both price and output level.
Thus, A is not the answer, but B.

2010-01-30 23:36:08 補充：
回應 chinese_epada 的問題:
1) 由始至終 price searcher 都沒有 supply curve, 又如何決定 market price 呢? 我們又如何確保市場會吸納倒多出黎既貨呢?
Price-searcher 是以 market demand curve 來定 market price, need not the presence of supply curve.
Me: 如果 no supply curve --> no market price, 怎能有 transaction-->怎能有 market of price-searcher?

2010-01-30 23:36:20 補充：
2) 「究竟係reduce output定係increase price會帶黎更大既wealth, 我相信係要睇Ed, 只但係我唔知道點樣解釋倒落去.」
我絕對明白閣下的意思, 因為 Ed 的確 affect our analysis a lot.
我也是陷入了這個思想困局 =.="
Me: Ed should be irrelevant 因為題目沒有提供有關 P<--> Q and TR 的資料. Ed remains uncertain.
Resource: from my concept and reference books

2010-01-30 23:41:06 補充：
Comment:
問題看來深奧, 答案會是出奇地簡單!

2010-01-30 23:42:06 補充：
更正打錯位置
回應 chinese_epada 的問題:
1) 由始至終 price searcher 都沒有 supply curve, 又如何決定 market price 呢? 我們又如何確保市場會吸納倒多出黎既貨呢?
Me: Price-searcher 是以 market demand curve 來定 market price, need not the presence of supply curve.
如果 no supply curve --> no market price, 怎能有 transaction-->怎能有 market of price-searcher?

第二題, 答案係B. 一開始我同你諗法一樣, 只但係有個bug. 問題問既係price searcher(PS), 如果佢問price taker既話, 你既解釋應該正確. 一般來說, PS生產到MC=MR, 而MR係D既一半. 即係話, 就算PS因生產過多而導致MC>MR, 市場仍會吸納倒多出黎既貨, 而且Qd>Qs. 因此, PS可直接提升P黎increase profit without extra costs.

2009-01-01 01:07:54 補充：
至於究竟係reduce output定係increase price會帶黎更大既wealth, 我相信係要睇Ed, 只但係我唔知道點樣解釋倒落去.

不過, 假設解釋得倒既話, 又產生出另一個問題. 既然MC>MR仍然可以maximize wealth的話, 平時果一套係咪有bugs呢?

順帶一提, 題目來自HSSC internal mid-year past paper

2009-01-06 23:32:01 補充：
其實我都同同學們研究過哩題, 已經發覺倒A點解錯

for B, 其實我應該已經諗倒. 關鍵可能在於個「can」字, somehow我當佢係「may」. 因為我consider左兩個case, o係兩個不同既case, 各有一種maximize wealth既方法, 冇記錯的話, 關鍵在於佢個initial price

不過我諗既野寫左落份notes度, 冇帶番黎, 所以遲d先講- -