[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.03,0:00:02.75,Default,,0000,0000,0000,,so let's say we are in the Apple market
Dialogue: 0,0:00:02.75,0:00:05.16,Default,,0000,0000,0000,,what I want to do in this video is think
Dialogue: 0,0:00:05.16,0:00:07.98,Default,,0000,0000,0000,,about both demand and supply for the
Dialogue: 0,0:00:07.98,0:00:10.65,Default,,0000,0000,0000,,apples at different prices so let's draw
Dialogue: 0,0:00:10.65,0:00:13.80,Default,,0000,0000,0000,,ourselves a little graph here and we
Dialogue: 0,0:00:13.80,0:00:15.30,Default,,0000,0000,0000,,already know this right over here the
Dialogue: 0,0:00:15.30,0:00:17.37,Default,,0000,0000,0000,,vertical axis is the price axis and this
Dialogue: 0,0:00:17.37,0:00:19.62,Default,,0000,0000,0000,,is we're going to say it's price per
Dialogue: 0,0:00:19.62,0:00:22.17,Default,,0000,0000,0000,,pound and the horizontal axis this is
Dialogue: 0,0:00:22.17,0:00:26.07,Default,,0000,0000,0000,,the quantity the quantity of apples and
Dialogue: 0,0:00:26.07,0:00:27.87,Default,,0000,0000,0000,,let's put some tick marks here let's say
Dialogue: 0,0:00:27.87,0:00:29.25,Default,,0000,0000,0000,,that's one dollar a pound
Dialogue: 0,0:00:29.25,0:00:31.38,Default,,0000,0000,0000,,two dollars a pound three dollars a
Dialogue: 0,0:00:31.38,0:00:33.57,Default,,0000,0000,0000,,pound four dollars a pound and five
Dialogue: 0,0:00:33.57,0:00:35.94,Default,,0000,0000,0000,,dollars and let's say this is thousands
Dialogue: 0,0:00:35.94,0:00:39.03,Default,,0000,0000,0000,,thousands of pounds produce and we have
Dialogue: 0,0:00:39.03,0:00:40.35,Default,,0000,0000,0000,,to set a period so let's say this is all
Dialogue: 0,0:00:40.35,0:00:44.04,Default,,0000,0000,0000,,for the next week and so this is 1000
Dialogue: 0,0:00:44.04,0:00:49.26,Default,,0000,0000,0000,,pounds 2,000 3,000 4,000 and 5,000 now
Dialogue: 0,0:00:49.26,0:00:50.88,Default,,0000,0000,0000,,let's think about both the supply and
Dialogue: 0,0:00:50.88,0:00:54.09,Default,,0000,0000,0000,,the demand curves for this market or
Dialogue: 0,0:00:54.09,0:00:56.64,Default,,0000,0000,0000,,potential supply and demand curves so
Dialogue: 0,0:00:56.64,0:00:59.07,Default,,0000,0000,0000,,first I will do first I will do the
Dialogue: 0,0:00:59.07,0:01:03.09,Default,,0000,0000,0000,,demand so if we if the price of Apple's
Dialogue: 0,0:01:03.09,0:01:04.83,Default,,0000,0000,0000,,were really high and I encourage you to
Dialogue: 0,0:01:04.83,0:01:06.09,Default,,0000,0000,0000,,always think about this when you're
Dialogue: 0,0:01:06.09,0:01:07.47,Default,,0000,0000,0000,,about to draw your demand and supply
Dialogue: 0,0:01:07.47,0:01:10.29,Default,,0000,0000,0000,,curves if the price of Apple's were
Dialogue: 0,0:01:10.29,0:01:12.48,Default,,0000,0000,0000,,really high what would happen to
Dialogue: 0,0:01:12.48,0:01:13.95,Default,,0000,0000,0000,,consumers well they say they wouldn't
Dialogue: 0,0:01:13.95,0:01:16.11,Default,,0000,0000,0000,,demand much so the quantity demanded
Dialogue: 0,0:01:16.11,0:01:19.47,Default,,0000,0000,0000,,would be low so if the price were high
Dialogue: 0,0:01:19.47,0:01:21.84,Default,,0000,0000,0000,,maybe the quantity demanded is like 500
Dialogue: 0,0:01:21.84,0:01:25.53,Default,,0000,0000,0000,,apples 500 apples and and once again I'm
Dialogue: 0,0:01:25.53,0:01:27.18,Default,,0000,0000,0000,,being very careful to say the quantity
Dialogue: 0,0:01:27.18,0:01:28.95,Default,,0000,0000,0000,,demanded is 500 apples I'm not saying
Dialogue: 0,0:01:28.95,0:01:31.50,Default,,0000,0000,0000,,the demand is 500 apples the demand is
Dialogue: 0,0:01:31.50,0:01:33.90,Default,,0000,0000,0000,,the entire relationship the actual
Dialogue: 0,0:01:33.90,0:01:35.70,Default,,0000,0000,0000,,specific quantity we call that the
Dialogue: 0,0:01:35.70,0:01:39.00,Default,,0000,0000,0000,,quantity demanded so at a price of $5
Dialogue: 0,0:01:39.00,0:01:40.74,Default,,0000,0000,0000,,the quantity demanded would be about 500
Dialogue: 0,0:01:40.74,0:01:43.26,Default,,0000,0000,0000,,maybe at a price of $1 the quantity
Dialogue: 0,0:01:43.26,0:01:46.56,Default,,0000,0000,0000,,demanded would be maybe 4,000 pounds and
Dialogue: 0,0:01:46.56,0:01:49.14,Default,,0000,0000,0000,,so our demand curve might look something
Dialogue: 0,0:01:49.14,0:01:50.16,Default,,0000,0000,0000,,like this
Dialogue: 0,0:01:50.16,0:01:52.05,Default,,0000,0000,0000,,might look something like that let me
Dialogue: 0,0:01:52.05,0:01:55.65,Default,,0000,0000,0000,,draw it a little bit less bumpy so our
Dialogue: 0,0:01:55.65,0:01:57.36,Default,,0000,0000,0000,,demand curve might look something like
Dialogue: 0,0:01:57.36,0:01:57.81,Default,,0000,0000,0000,,that
Dialogue: 0,0:01:57.81,0:02:00.93,Default,,0000,0000,0000,,I can label it that is our demand curve
Dialogue: 0,0:02:00.93,0:02:02.99,Default,,0000,0000,0000,,and I'll think about our supply curve
Dialogue: 0,0:02:02.99,0:02:05.97,Default,,0000,0000,0000,,well there's some price below which we
Dialogue: 0,0:02:05.97,0:02:08.43,Default,,0000,0000,0000,,aren't even willing to produce apples so
Dialogue: 0,0:02:08.43,0:02:10.83,Default,,0000,0000,0000,,let's say that's like 50 cents so at 50
Dialogue: 0,0:02:10.83,0:02:12.36,Default,,0000,0000,0000,,cents that's where we're even just
Dialogue: 0,0:02:12.36,0:02:13.68,Default,,0000,0000,0000,,willing to start producing
Dialogue: 0,0:02:13.68,0:02:16.05,Default,,0000,0000,0000,,apples let's say if Apple if the price
Dialogue: 0,0:02:16.05,0:02:19.11,Default,,0000,0000,0000,,of Apple's got to $1 we the quantity
Dialogue: 0,0:02:19.11,0:02:21.57,Default,,0000,0000,0000,,we'd be willing to supply is about a
Dialogue: 0,0:02:21.57,0:02:23.55,Default,,0000,0000,0000,,thousand pounds and it just keeps
Dialogue: 0,0:02:23.55,0:02:26.76,Default,,0000,0000,0000,,increasing as the price increases so
Dialogue: 0,0:02:26.76,0:02:28.86,Default,,0000,0000,0000,,this is the supply curve when I talk
Dialogue: 0,0:02:28.86,0:02:30.54,Default,,0000,0000,0000,,about we I'm talking about all of the
Dialogue: 0,0:02:30.54,0:02:32.22,Default,,0000,0000,0000,,suppliers in this market we could be
Dialogue: 0,0:02:32.22,0:02:33.84,Default,,0000,0000,0000,,doing this for a specific supplier we
Dialogue: 0,0:02:33.84,0:02:34.65,Default,,0000,0000,0000,,could be doing this for a specific
Dialogue: 0,0:02:34.65,0:02:36.21,Default,,0000,0000,0000,,market we could be doing this for the
Dialogue: 0,0:02:36.21,0:02:38.67,Default,,0000,0000,0000,,global Apple market however you want to
Dialogue: 0,0:02:38.67,0:02:40.44,Default,,0000,0000,0000,,view it but for the sake of this video
Dialogue: 0,0:02:40.44,0:02:41.97,Default,,0000,0000,0000,,let's assume it's like our little town
Dialogue: 0,0:02:41.97,0:02:44.27,Default,,0000,0000,0000,,that is fairly isolated and all of that
Dialogue: 0,0:02:44.27,0:02:47.04,Default,,0000,0000,0000,,now let's think about what happens in
Dialogue: 0,0:02:47.04,0:02:50.43,Default,,0000,0000,0000,,different scenarios what happens if the
Dialogue: 0,0:02:50.43,0:02:54.18,Default,,0000,0000,0000,,the the suppliers of the apples going
Dialogue: 0,0:02:54.18,0:02:55.92,Default,,0000,0000,0000,,into that week for their own planning
Dialogue: 0,0:02:55.92,0:02:58.53,Default,,0000,0000,0000,,purposes they just think for whatever
Dialogue: 0,0:02:58.53,0:03:00.21,Default,,0000,0000,0000,,reason that they're only going to be
Dialogue: 0,0:03:00.21,0:03:02.25,Default,,0000,0000,0000,,able to sell the apples at $1 per pound
Dialogue: 0,0:03:02.25,0:03:05.40,Default,,0000,0000,0000,,and so given that given their given the
Dialogue: 0,0:03:05.40,0:03:07.35,Default,,0000,0000,0000,,supply curve they only they're only they
Dialogue: 0,0:03:07.35,0:03:08.90,Default,,0000,0000,0000,,only are able to supply only supply
Dialogue: 0,0:03:08.90,0:03:11.70,Default,,0000,0000,0000,,1,000 pounds so this is what the
Dialogue: 0,0:03:11.70,0:03:13.50,Default,,0000,0000,0000,,supplier is planned for and this is
Dialogue: 0,0:03:13.50,0:03:15.36,Default,,0000,0000,0000,,where they set the price point at one
Dialogue: 0,0:03:15.36,0:03:18.30,Default,,0000,0000,0000,,dollar at one dollar per pound now
Dialogue: 0,0:03:18.30,0:03:20.15,Default,,0000,0000,0000,,what's going to happen in that scenario
Dialogue: 0,0:03:20.15,0:03:22.70,Default,,0000,0000,0000,,well in that scenario they supplied
Dialogue: 0,0:03:22.70,0:03:26.22,Default,,0000,0000,0000,,1,000 the quantity supplied is 1,000
Dialogue: 0,0:03:26.22,0:03:28.65,Default,,0000,0000,0000,,pounds so let me write this down so I'll
Dialogue: 0,0:03:28.65,0:03:30.96,Default,,0000,0000,0000,,do it in pink for this scenario so in
Dialogue: 0,0:03:30.96,0:03:35.45,Default,,0000,0000,0000,,this area the quantity quantity supplied
Dialogue: 0,0:03:35.45,0:03:39.27,Default,,0000,0000,0000,,quantity supplied is 1,000 pounds and
Dialogue: 0,0:03:39.27,0:03:42.99,Default,,0000,0000,0000,,what is the quantity demanded quantity
Dialogue: 0,0:03:42.99,0:03:48.30,Default,,0000,0000,0000,,demanded demanded demanded and this is
Dialogue: 0,0:03:48.30,0:03:51.33,Default,,0000,0000,0000,,all a scenario where the price the price
Dialogue: 0,0:03:51.33,0:03:53.37,Default,,0000,0000,0000,,or the initial price that the growers or
Dialogue: 0,0:03:53.37,0:03:55.80,Default,,0000,0000,0000,,the producer set was one dollar per
Dialogue: 0,0:03:55.80,0:03:58.26,Default,,0000,0000,0000,,pound one dollar per pound
Dialogue: 0,0:03:58.26,0:04:00.00,Default,,0000,0000,0000,,well the quantity demanded one dollar
Dialogue: 0,0:04:00.00,0:04:02.97,Default,,0000,0000,0000,,per pound is four thousand four thousand
Dialogue: 0,0:04:02.97,0:04:05.64,Default,,0000,0000,0000,,pounds of apples four thousand pounds of
Dialogue: 0,0:04:05.64,0:04:08.22,Default,,0000,0000,0000,,apples so what do we have here well here
Dialogue: 0,0:04:08.22,0:04:11.39,Default,,0000,0000,0000,,we have a shortage we have a shortage of
Dialogue: 0,0:04:11.39,0:04:17.22,Default,,0000,0000,0000,,we have a shortage a shortage of 3,000
Dialogue: 0,0:04:17.22,0:04:19.65,Default,,0000,0000,0000,,apples at that price point at a dollar a
Dialogue: 0,0:04:19.65,0:04:21.78,Default,,0000,0000,0000,,lot more people are going to want to buy
Dialogue: 0,0:04:21.78,0:04:24.18,Default,,0000,0000,0000,,apples and these the producers just
Dialogue: 0,0:04:24.18,0:04:26.25,Default,,0000,0000,0000,,didn't I guess did they didn't they
Dialogue: 0,0:04:26.25,0:04:26.57,Default,,0000,0000,0000,,didn't
Dialogue: 0,0:04:26.57,0:04:27.89,Default,,0000,0000,0000,,figure that out right and they didn't
Dialogue: 0,0:04:27.89,0:04:30.08,Default,,0000,0000,0000,,produce enough apples now what will
Dialogue: 0,0:04:30.08,0:04:32.45,Default,,0000,0000,0000,,naturally start happening if you have
Dialogue: 0,0:04:32.45,0:04:34.10,Default,,0000,0000,0000,,the short you have all these people who
Dialogue: 0,0:04:34.10,0:04:35.84,Default,,0000,0000,0000,,want to buy apples and you only have so
Dialogue: 0,0:04:35.84,0:04:38.09,Default,,0000,0000,0000,,many apples there well what might happen
Dialogue: 0,0:04:38.09,0:04:40.58,Default,,0000,0000,0000,,in the next period in the next week well
Dialogue: 0,0:04:40.58,0:04:42.38,Default,,0000,0000,0000,,first of all those apples that are out
Dialogue: 0,0:04:42.38,0:04:44.30,Default,,0000,0000,0000,,there they might get bid up so the
Dialogue: 0,0:04:44.30,0:04:46.67,Default,,0000,0000,0000,,prices start going to start going up the
Dialogue: 0,0:04:46.67,0:04:48.44,Default,,0000,0000,0000,,price is going to start going up people
Dialogue: 0,0:04:48.44,0:04:49.94,Default,,0000,0000,0000,,are going to start bidding up the apples
Dialogue: 0,0:04:49.94,0:04:51.41,Default,,0000,0000,0000,,they want them so badly they're going to
Dialogue: 0,0:04:51.41,0:04:53.27,Default,,0000,0000,0000,,start bidding them up and as they start
Dialogue: 0,0:04:53.27,0:04:55.19,Default,,0000,0000,0000,,getting bit up the producers are going
Dialogue: 0,0:04:55.19,0:04:56.84,Default,,0000,0000,0000,,to say wow there's so many people we're
Dialogue: 0,0:04:56.84,0:04:58.85,Default,,0000,0000,0000,,running out of apples we also need to
Dialogue: 0,0:04:58.85,0:05:02.12,Default,,0000,0000,0000,,increase the quantity produced and so
Dialogue: 0,0:05:02.12,0:05:05.69,Default,,0000,0000,0000,,the quantity the quantity will also go
Dialogue: 0,0:05:05.69,0:05:07.91,Default,,0000,0000,0000,,up so the price will go up if you look
Dialogue: 0,0:05:07.91,0:05:09.74,Default,,0000,0000,0000,,at from the from the suppliers point of
Dialogue: 0,0:05:09.74,0:05:11.60,Default,,0000,0000,0000,,view the price will go up and the
Dialogue: 0,0:05:11.60,0:05:14.03,Default,,0000,0000,0000,,quantity will go up they will move they
Dialogue: 0,0:05:14.03,0:05:16.49,Default,,0000,0000,0000,,will move along this line there so maybe
Dialogue: 0,0:05:16.49,0:05:17.87,Default,,0000,0000,0000,,in the next period there's less of a
Dialogue: 0,0:05:17.87,0:05:20.21,Default,,0000,0000,0000,,shortage or they get slowed they move
Dialogue: 0,0:05:20.21,0:05:22.13,Default,,0000,0000,0000,,they move away from that shortage
Dialogue: 0,0:05:22.13,0:05:23.90,Default,,0000,0000,0000,,situation if the quantity if the price
Dialogue: 0,0:05:23.90,0:05:25.64,Default,,0000,0000,0000,,and quantity increase a little bit so
Dialogue: 0,0:05:25.64,0:05:28.31,Default,,0000,0000,0000,,maybe the price goes to $2 now and the
Dialogue: 0,0:05:28.31,0:05:29.69,Default,,0000,0000,0000,,quantity goes to I don't know this looks
Dialogue: 0,0:05:29.69,0:05:32.99,Default,,0000,0000,0000,,like about 1,900 1,900 pounds now of a
Dialogue: 0,0:05:32.99,0:05:36.17,Default,,0000,0000,0000,,sudden you have less of a shortage and I
Dialogue: 0,0:05:36.17,0:05:37.58,Default,,0000,0000,0000,,think you see that I'm getting to an
Dialogue: 0,0:05:37.58,0:05:39.02,Default,,0000,0000,0000,,interesting point over here but I won't
Dialogue: 0,0:05:39.02,0:05:41.18,Default,,0000,0000,0000,,go there just yet I won't go there just
Dialogue: 0,0:05:41.18,0:05:42.53,Default,,0000,0000,0000,,yet now let's think about another
Dialogue: 0,0:05:42.53,0:05:44.66,Default,,0000,0000,0000,,situation let's think about after this
Dialogue: 0,0:05:44.66,0:05:46.94,Default,,0000,0000,0000,,happens price and quantity increases so
Dialogue: 0,0:05:46.94,0:05:49.04,Default,,0000,0000,0000,,much that essentially overshoots this
Dialogue: 0,0:05:49.04,0:05:51.44,Default,,0000,0000,0000,,interesting point right over here so in
Dialogue: 0,0:05:51.44,0:05:53.57,Default,,0000,0000,0000,,the next week the suppliers all say wow
Dialogue: 0,0:05:53.57,0:05:56.93,Default,,0000,0000,0000,,people want our apples so badly let's
Dialogue: 0,0:05:56.93,0:05:59.87,Default,,0000,0000,0000,,just the price really high $3 and $3
Dialogue: 0,0:05:59.87,0:06:01.55,Default,,0000,0000,0000,,we're really excited about producing
Dialogue: 0,0:06:01.55,0:06:04.49,Default,,0000,0000,0000,,apples so we the suppliers we the
Dialogue: 0,0:06:04.49,0:06:06.47,Default,,0000,0000,0000,,suppliers are going to produce let me do
Dialogue: 0,0:06:06.47,0:06:08.60,Default,,0000,0000,0000,,this in a color I haven't used yet we
Dialogue: 0,0:06:08.60,0:06:12.11,Default,,0000,0000,0000,,the suppliers are going to produce at $3
Dialogue: 0,0:06:12.11,0:06:14.87,Default,,0000,0000,0000,,a pound we're hoping to sell 3,000
Dialogue: 0,0:06:14.87,0:06:17.30,Default,,0000,0000,0000,,pounds of apples so this is where maybe
Dialogue: 0,0:06:17.30,0:06:19.25,Default,,0000,0000,0000,,were they adjust to the next week but
Dialogue: 0,0:06:19.25,0:06:20.63,Default,,0000,0000,0000,,what's going to happen there at a price
Dialogue: 0,0:06:20.63,0:06:23.03,Default,,0000,0000,0000,,of $3 so that's this scenario right over
Dialogue: 0,0:06:23.03,0:06:27.79,Default,,0000,0000,0000,,here the price of $3 so the price is now
Dialogue: 0,0:06:27.79,0:06:31.31,Default,,0000,0000,0000,,the price is now $3 per pound
Dialogue: 0,0:06:31.31,0:06:36.43,Default,,0000,0000,0000,,well now the quantity quantity supplied
Dialogue: 0,0:06:36.43,0:06:40.61,Default,,0000,0000,0000,,the quantity supplied is going to be 3
Dialogue: 0,0:06:40.61,0:06:44.27,Default,,0000,0000,0000,,thousand pounds three thousand three
Dialogue: 0,0:06:44.27,0:06:46.16,Default,,0000,0000,0000,,thousand pounds I could write three
Dialogue: 0,0:06:46.16,0:06:48.38,Default,,0000,0000,0000,,thousand pounds and what is the quantity
Dialogue: 0,0:06:48.38,0:06:53.20,Default,,0000,0000,0000,,demanded the quantity demanded quantity
Dialogue: 0,0:06:53.20,0:06:56.75,Default,,0000,0000,0000,,demanded is now much lower the price is
Dialogue: 0,0:06:56.75,0:06:58.76,Default,,0000,0000,0000,,high now because consumers might want to
Dialogue: 0,0:06:58.76,0:07:00.26,Default,,0000,0000,0000,,go buy other things or they too can't
Dialogue: 0,0:07:00.26,0:07:01.61,Default,,0000,0000,0000,,afford an Apple or whatever it might be
Dialogue: 0,0:07:01.61,0:07:04.46,Default,,0000,0000,0000,,and so now the quantity demanded that
Dialogue: 0,0:07:04.46,0:07:07.49,Default,,0000,0000,0000,,looks like about not know 1300 1300
Dialogue: 0,0:07:07.49,0:07:10.88,Default,,0000,0000,0000,,pounds 1300 pounds so what situation do
Dialogue: 0,0:07:10.88,0:07:13.46,Default,,0000,0000,0000,,we have now well now we have a much
Dialogue: 0,0:07:13.46,0:07:16.70,Default,,0000,0000,0000,,bigger supply or the quantity supplied
Dialogue: 0,0:07:16.70,0:07:18.08,Default,,0000,0000,0000,,is much bigger than the quantity
Dialogue: 0,0:07:18.08,0:07:22.13,Default,,0000,0000,0000,,demanded so now we face we face a
Dialogue: 0,0:07:22.13,0:07:26.18,Default,,0000,0000,0000,,surplus so now we have a surplus
Dialogue: 0,0:07:26.18,0:07:27.47,Default,,0000,0000,0000,,let me not draw that line there I want
Dialogue: 0,0:07:27.47,0:07:28.61,Default,,0000,0000,0000,,to make it clear this is all the same
Dialogue: 0,0:07:28.61,0:07:32.81,Default,,0000,0000,0000,,scenario we now have a surplus of what
Dialogue: 0,0:07:32.81,0:07:34.73,Default,,0000,0000,0000,,is this seven hundred will get us to two
Dialogue: 0,0:07:34.73,0:07:37.16,Default,,0000,0000,0000,,thousand we have a surplus of 1700
Dialogue: 0,0:07:37.16,0:07:40.37,Default,,0000,0000,0000,,pounds of apples and now what happens in
Dialogue: 0,0:07:40.37,0:07:42.92,Default,,0000,0000,0000,,a surplus situation well apples won't
Dialogue: 0,0:07:42.92,0:07:46.10,Default,,0000,0000,0000,,stay good forever so maybe the producers
Dialogue: 0,0:07:46.10,0:07:47.96,Default,,0000,0000,0000,,get a little desperate so you start they
Dialogue: 0,0:07:47.96,0:07:50.45,Default,,0000,0000,0000,,start selling they start reducing the
Dialogue: 0,0:07:50.45,0:07:52.70,Default,,0000,0000,0000,,price maybe to start attracting some
Dialogue: 0,0:07:52.70,0:07:54.65,Default,,0000,0000,0000,,consumers so they start reducing the
Dialogue: 0,0:07:54.65,0:07:57.02,Default,,0000,0000,0000,,price and also when they when they start
Dialogue: 0,0:07:57.02,0:07:58.37,Default,,0000,0000,0000,,seeing that the price is going down and
Dialogue: 0,0:07:58.37,0:07:59.93,Default,,0000,0000,0000,,you have this glut of apples and that
Dialogue: 0,0:07:59.93,0:08:01.25,Default,,0000,0000,0000,,they're all going bad and they're not
Dialogue: 0,0:08:01.25,0:08:04.04,Default,,0000,0000,0000,,getting sold the quantity the quantity
Dialogue: 0,0:08:04.04,0:08:06.41,Default,,0000,0000,0000,,is also going to start going down
Dialogue: 0,0:08:06.41,0:08:07.94,Default,,0000,0000,0000,,they'll produce fewer and fewer apples
Dialogue: 0,0:08:07.94,0:08:11.18,Default,,0000,0000,0000,,and so we'll move here we'll move here
Dialogue: 0,0:08:11.18,0:08:13.82,Default,,0000,0000,0000,,along the supply curve and as you
Dialogue: 0,0:08:13.82,0:08:17.06,Default,,0000,0000,0000,,decrease as you decrease the price as
Dialogue: 0,0:08:17.06,0:08:18.74,Default,,0000,0000,0000,,you decrease the price what's going to
Dialogue: 0,0:08:18.74,0:08:20.18,Default,,0000,0000,0000,,happen to the demand curve well the
Dialogue: 0,0:08:20.18,0:08:23.09,Default,,0000,0000,0000,,demand is going to go up so over here
Dialogue: 0,0:08:23.09,0:08:25.64,Default,,0000,0000,0000,,the price was too high so there's it's
Dialogue: 0,0:08:25.64,0:08:27.62,Default,,0000,0000,0000,,natural for the sellers to lower the
Dialogue: 0,0:08:27.62,0:08:29.93,Default,,0000,0000,0000,,price and so when you lower the price it
Dialogue: 0,0:08:29.93,0:08:31.46,Default,,0000,0000,0000,,also reduces the quantity we go this way
Dialogue: 0,0:08:31.46,0:08:32.96,Default,,0000,0000,0000,,and when you lower the price it
Dialogue: 0,0:08:32.96,0:08:35.30,Default,,0000,0000,0000,,increases demand you go that way if the
Dialogue: 0,0:08:35.30,0:08:37.28,Default,,0000,0000,0000,,price to get from the get-go were too
Dialogue: 0,0:08:37.28,0:08:39.44,Default,,0000,0000,0000,,low then you have this huge shortage
Dialogue: 0,0:08:39.44,0:08:41.93,Default,,0000,0000,0000,,things get bit up the prices go up as
Dialogue: 0,0:08:41.93,0:08:44.36,Default,,0000,0000,0000,,the price goes up the suppliers want to
Dialogue: 0,0:08:44.36,0:08:46.19,Default,,0000,0000,0000,,produce more they move up the curve and
Dialogue: 0,0:08:46.19,0:08:48.83,Default,,0000,0000,0000,,as the price boot goes up then the
Dialogue: 0,0:08:48.83,0:08:51.32,Default,,0000,0000,0000,,people will demand less and you see that
Dialogue: 0,0:08:51.32,0:08:53.45,Default,,0000,0000,0000,,it's all converging on a point right
Dialogue: 0,0:08:53.45,0:08:54.17,Default,,0000,0000,0000,,over here
Dialogue: 0,0:08:54.17,0:08:56.09,Default,,0000,0000,0000,,the two lines intersect and let me do
Dialogue: 0,0:08:56.09,0:08:59.45,Default,,0000,0000,0000,,that in a it's all converging right over
Dialogue: 0,0:08:59.45,0:09:02.24,Default,,0000,0000,0000,,there and that's the point at which
Dialogue: 0,0:09:02.24,0:09:05.78,Default,,0000,0000,0000,,supply that's the price at which this is
Dialogue: 0,0:09:05.78,0:09:07.94,Default,,0000,0000,0000,,the price at which the quantity supplied
Dialogue: 0,0:09:07.94,0:09:11.15,Default,,0000,0000,0000,,will equal the quantity demanded and we
Dialogue: 0,0:09:11.15,0:09:13.55,Default,,0000,0000,0000,,call this price we call this which looks
Dialogue: 0,0:09:13.55,0:09:16.31,Default,,0000,0000,0000,,like for this scenario maybe about two
Dialogue: 0,0:09:16.31,0:09:18.86,Default,,0000,0000,0000,,dollars and fifteen cents so let me just
Dialogue: 0,0:09:18.86,0:09:20.33,Default,,0000,0000,0000,,write it there so two dollars and
Dialogue: 0,0:09:20.33,0:09:21.02,Default,,0000,0000,0000,,fifteen cents
Dialogue: 0,0:09:21.02,0:09:24.34,Default,,0000,0000,0000,,we call that the equilibrium price
Dialogue: 0,0:09:24.34,0:09:28.40,Default,,0000,0000,0000,,equilibrium equilibrium equilibrium
Dialogue: 0,0:09:28.40,0:09:32.24,Default,,0000,0000,0000,,price is two dollars and fifteen cents a
Dialogue: 0,0:09:32.24,0:09:34.97,Default,,0000,0000,0000,,pound and it's the price at which the
Dialogue: 0,0:09:34.97,0:09:36.95,Default,,0000,0000,0000,,quantity supplied is equal to the
Dialogue: 0,0:09:36.95,0:09:39.86,Default,,0000,0000,0000,,quantity demanded and so this this
Dialogue: 0,0:09:39.86,0:09:42.98,Default,,0000,0000,0000,,quantity this this quantity where supply
Dialogue: 0,0:09:42.98,0:09:44.75,Default,,0000,0000,0000,,or the quantity supplied is equal to the
Dialogue: 0,0:09:44.75,0:09:46.55,Default,,0000,0000,0000,,quantity demanded that's the equilibrium
Dialogue: 0,0:09:46.55,0:09:51.19,Default,,0000,0000,0000,,quantity equilibrium equilibrium
Dialogue: 0,0:09:51.19,0:09:54.29,Default,,0000,0000,0000,,quantity and that right over here looks
Dialogue: 0,0:09:54.29,0:09:57.37,Default,,0000,0000,0000,,like it's right about I don't know 2,200
Dialogue: 0,0:09:57.37,0:10:01.85,Default,,0000,0000,0000,,2,200 pounds 2,200 pounds and assuming
Dialogue: 0,0:10:01.85,0:10:03.50,Default,,0000,0000,0000,,nothing else changes this is a good
Dialogue: 0,0:10:03.50,0:10:06.59,Default,,0000,0000,0000,,scenario for both the consumers and the
Dialogue: 0,0:10:06.59,0:10:09.47,Default,,0000,0000,0000,,producers that they keep producing 2,200
Dialogue: 0,0:10:09.47,0:10:11.51,Default,,0000,0000,0000,,they charge this price and everything's
Dialogue: 0,0:10:11.51,0:10:13.94,Default,,0000,0000,0000,,happy all the apples get sold and none
Dialogue: 0,0:10:13.94,0:10:16.75,Default,,0000,0000,0000,,of them go bad