00:01
So what does a monopolist want to do, right? as you say that the monopolist wants to maximize profits.
00:09
Great.
00:09
So what the heck is profit? well, profit is equal to revenue, the money you bring in, minus cost the money that goes out.
00:18
So what you want to do is think about if i sell more than what.
00:29
There are a couple of options.
00:31
One is that the change in revenue is greater than the change in cost, right? this increases profit and what that means is you should do more, right? if you are selling another unit and it increases your revenue by more than your cost, your profit has increased, right? you need to keep going.
00:55
You need to keep selling more units.
00:57
And then if the change in revenue is less than the cost, what you're doing is decreases profit.
01:09
So you need to do less, right? if you produce another unit and it contributes negatively to profit because it increases your costs by more than your revenue, this is a bad idea.
01:18
You need to go backwards...