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Good afternoon class my name is Dan Bell I'm your professor
for your economics course in this afternoon no one talked to you about the
supply curve
I hope you watch my up my first video on the demand curve not show to
demand
for an individual buyer cattle or racer he needed corn
to feed his cattle well the flip side that is the supplier were securing the
corn in order i to be producing the corn
for the farmer to buy and feed his cattle. So today I will talk about the supply curve
for
an individual supply curve for a producer for a producer of corn
that in the market producing that corn
utilized for the buyer. of the
corn to feed his cattle.
So let's take a look at
what route we're looking at here.
Here we have quantity like on the demand curve we have quantity
with what we are looking at here.
This will be per week .
but this is going to be supply.
but on the demand curve we are going to talk about demanded per week. Here we
want to talk about supply. This price per bushel as shown.
okay so
unlike the demand curve which is sloping, the supply curve is going to be like
that.
It's going to be upward sloping. Well, let's take a
look and see what it indicates.
Lets start with p1 Q1.
Let's take a look at that point. This is a hypothetical.
We will put it for producer one.
Producer one. ok. What this says is that
it shows what a producer is willing and able to put on the market
at various prices. Here's a series of prices and here's the quantities that they want
to put on the market.
So, what is a producer willing an able to put on the market?
well look at low price at p1. This producer will only put on the market q1.
However, at a higher price, let's call it p3,
notice that if prices were higher the producer would be willing to put out the market
Q3. Notice from here from 0 to all the way out here.
Or, this amount more than q1.
So this higher this higher price
brought about this much more quantity that the producers want to put on the market.
Why is that the case? Well a couple reasons. Think about it intuitively.
Higher prices that a producer gets,
generally, it should hopefully mean more profits if they're keeping
their costs under control.
Ok, what about those costs under control? Well think about if they're producing
more the of other costs are going up.
They may have to run more electricity, more fertilizer to grow the corn,
more labors to plant the corn, more machinery to operate
to cultivate more land that maybe they hadn't utilized in the past.
The point is that as the
output goes up their cost definitely go up. So they're definitely going to
have to have a higher price.
So, that's the intuitive reason behind the upward sloping supply curve that's kind of like
kinda like
what's called a law of supply like the law of demand. The law supply,
as your textbook talks about the law of supply
and that talks about the right
relationship between
P and QS. In other words as the price goes up
from P1 to p3, that leads to an increase in
quantity supplied. If the price would go down
it would work alternatively a decrease in price would lead to a
to decrease in quantity supplied. So there's a direct relationship between these two
variables, price and quantity supplied.
One goes up the other goes up the other goes up.the other goes up. If one goes down the other goes down.
In other words, if at if we are at P4,
let's call it Q4,
the producer would put out
q4 but if the price for p3 if some how it went down ,you would move along this
supply curve.
You would be at this point p3 and Q3.
Quantities would go to q5 to
q3 when t the price goes from p4 to p3.
So again you move along the supply curve. So
that is
the the essence of the a individual