3. Supply and Demand
The Basics of Supply
3. Supply and Demand
The Basics of Supply - Video Tutorials & Practice Problems
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The Basics of Supply
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alright now that we've wrapped up our discussion on demand, let's move on to supply. So I hope you guys see a lot of similarities here between what we're doing in demand and what we're gonna be doing here with supply. So supply relates to the behavior of the sellers. Are the suppliers in our market here. Um So the suppliers, I'm gonna write them both in here, suppliers, sellers, we're gonna use those terms interchangeably. You might even hear producers as well. Um So just like we had quantity demanded, we are gonna have the quantity supplied being the amount of a good that the sellers are willing to produce. Right? So we're gonna use the Q. S. Just like we had the Q. D. We've got Q. S. Here. Um So at any given price there's gonna be a quantity that will be supplied and the supply schedule is going to list these pairs um at different prices, how much quantity will be supplied. So just like we had the law of demand. Now we have the law of supply when the price of a good rises, the quantity supplied of that good rises. So remember with demand, the price went up, the quantity demanded went down. Now they're gonna be moving in the same direction. This is going to be a directly proportional relationship, right quantity supplied is gonna rise with price. So let me write that in here, price is gonna go up, that means the quantity supplied is gonna go up vice versa. The price goes down, quantity supplied will go down right? And this kind of makes sense right? If there's a higher price, more people are going to be willing to sell that product like hey the price of cereal went up. Maybe we should get into the cereal business right? I don't know. So the idea here is that they're going to move together price and quantity supplied will move in the same direction. So let's finish up our discussion here with the supply curve. Just like we had a demand curve. We are going to have a supply curve as well. So the supply curve is gonna be the graph is a graph showing the relationship between the price of a good and its quantity supplied. And remember just like the supply, the demand curve was what we call demand here, this is supply, right? So we're gonna make that distinction between supply and quantity supplied. And we're gonna just use an S. For supply, just like we use the big D. For demand will use the big S. For supply. So here right behind me, I've got a supply schedule for wheat and we've got different prices and different quantities that will be supplied at those prices. So notice when there's a high price of $9, you're gonna see a high quantity of 60,000. And as the price decreases you're gonna see decreases in the quantity supplied as well. So I've already put these points on our graph here. And just to reiterate right, we're gonna have the price on the Y axis quantity on the X axis, right, alphabetical order is the easy way to remember that. So I'm gonna go ahead and connect these dots to make our supply curve. Man, I'm just missing right now. Okay, so here we go. One more. One more. That's the one. Alright, so that will be our supply curve right there. Cool. And notice that the the supply curve uh here I am again. High. Alright. No notice that the supply curve slopes upward. And remember my little demonic before the double Ds demand downward and supply? Well that's just the other one. If you remember demand is downward. Supply is upward. Cool. Alright, let's go ahead and move on to the next video.