Congratulations! You made it past chapter 2! I believe it was a challenging chapter and if you managed to understand it fully, good on you! If you have not, it is not too late. Go back and view the videos again. Feel free to email us at firstname.lastname@example.org if you have any burning questions to get off your chest. We will do our utmost best to help you understand and beat that that chapter to the ground!
We now move on to chapter 3, Behavior of the firm.
Essentially, this chapter is very similar to chapter 2 so if you already have a good grasp on consumer theory, you will find no problem with this chapter.
A consumer focuses mainly on utility maximization while a firm focuses on cost minimization and depending on the market structure which we will talk about in chapter 4, maximize profits.
Introducing the concept of the expansion path, this would enable us to understand why production is always cheaper in the long run than in the short run. This is also where we fully understand the meaning of being productively efficient using graphical means.
At the end of this video, you should be able to: