The Supply Curve
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Not Synced♪ [music] ♪
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Not Synced- [Narrator] Now that we've got
the demand curve down, -
Not Syncedlet's move on to the supply curve.
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Not SyncedA supply curve shows how much
of a good suppliers -
Not Syncedare willing and able to supply
at different prices. -
Not SyncedAs with the demand curve,
there's a supply curve -
Not Syncedfor every good and service.
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Not SyncedAnd again the ideas
are the same, so let's look -
Not Syncedat the supply curve for oil.
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Not SyncedWe see an intuitive relationship
between price -
Not Syncedand the quantity supplied.
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Not SyncedAs the price goes up,
the quantity of oil -
Not Syncedthat companies are willing
to supply increases. -
Not SyncedIn this example, in a low price,
$5 per barrel, -
Not Syncedlet's say 10 million barrels
of oil are supplied per day. -
Not SyncedAt $20 per barrel,
25 million barrels are supplied, -
Not Syncedand at $55 per barrel,
50 million barrels are supplied. -
Not SyncedSo in general, a higher price
means a greater quantity supplied. -
Not SyncedLet's go deeper and see why.
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Not SyncedOil exists all over the world,
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Not Syncedbut it's not equally easy
to extract. -
Not SyncedIn some places like Saudi Arabia,
it's really easy to get oil -
Not Syncedout of the ground.
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Not SyncedIt's costs about $2 a barrel
to extract. -
Not SyncedOil in the US, like from Alaska,
is a lot deeper -
Not Syncedand getting out cost more,
at least $10 per barrel. -
Not SyncedAnd producing oil from an oil rig,
like the Atlantis rig -
Not Syncedin the Gulf Coast,
is even more expensive. -
Not SyncedThat rig has to descend
more than a mile underwater -
Not Syncedbefore drilling even begins.
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Not SyncedWhen oil prices are relatively low,
the only suppliers -
Not Syncedthat can turn a profit
are those who can get -
Not Syncedto the oil cheaply,
like Saudi Arabia. -
Not SyncedAs the price goes up,
other suppliers in Nigeria, -
Not SyncedRussia, and Alaska, who have higher
extraction costs, -
Not Syncedstarts to become profitable
so they can enter the market. -
Not SyncedAs the price gets higher,
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Not Syncedeven the most expensive
extraction techniques -
Not Syncedbecome profitable.
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Not SyncedThe supply curve slopes upward
because the only way the quantity -
Not Syncedof oil can be increased
is to exploit higher and higher -
Not Syncedcost sources of oil.
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Not SyncedAs the price of oil goes up,
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Not Syncedthe depth of the oil wells
goes down. -
Not SyncedWith this simple line
the supply curve summarizes -
Not Syncedthe way suppliers respond
to a change in price -
Not Syncedincluding how suppliers
will enter and exit the market -
Not Synceddepending on the price.
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Not SyncedSo far, we've said things
like if the price goes down, -
Not Syncedbuyers will want to buy more
or if the price rises, -
Not Syncedsuppliers will want to sell more.
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Not SyncedBut we haven't said anything
about how prices are determined. -
Not SyncedThat's the subject
for the next video, -
Not SyncedEquilibrium.
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Not SyncedIf you want to test yourself,
click "Practice Questions." -
Not SyncedOr if you're ready to move on,
just click "Next Video". -
Not Synced♪ [music] ♪
- Title:
- The Supply Curve
- Description:
-
{'type': u'plain'}
- Video Language:
- English
- Team:
- Marginal Revolution University
- Project:
- Micro
- Duration:
- 02:55
Martel Espiritu edited English subtitles for The Supply Curve | ||
Martel Espiritu edited English subtitles for The Supply Curve | ||
Martel Espiritu edited English subtitles for The Supply Curve | ||
pu phuc edited English subtitles for The Supply Curve | ||
MRU2 edited English subtitles for The Supply Curve | ||
MRUniversity edited English subtitles for The Supply Curve |