Elasticity of Supply: Real World Examples

[@MarginalRevolutionUniversity]

Continue learning with practice questions: mru.io/axv

[@alwaysfallingshort]

The slavery example is incredibly apropos because it shows how trying to fix a problem isn't as simple as it might seem. If your goal is to lower the demand for slaves, you have to understand how the market forces of slavery are impacted. Other examples wouldn't show the clear intention of the program vs its results, as other Policies might have more nuanced and complex forces that goes into calculating values. This is a pretty straight forward, easy to follow and validate. You might not understand why egg cartons are inherently inelastic and you end up just taking the example as a variable, but you can intuitively understand why the intended goal of the program was not achieved.

[@Jimothy-723]

all of that is incredibly odious.

[@venitatashlitsky-gf8dv]

There are better, more appropriate examples to use that can get the same message across without implying that we should for A SINGLE MOMENT consider "economic consequences," of NOT selling HUMANS. WTF????

[@alwaysfallingshort]

@@venitatashlitsky-gf8dv See it isn't an example. It's a real world thing we want to reduce, so we have to understand the economic forces that impact it. That's literally just it, in no way to I personally want or value slavery, but someone does because it happens so pretending it doesn't have value to someone is just ignoring the problem.

[@Andy-em8xt]

Very interesting. In NZ we had a gun buyback recently and it did work precisely because it was national not local. And as NZ is a lonely Island far from everywhere, it makes it impossible to increase supply from elsewhere.

[@OfficerK-D6-37]

People getting triggered by the examples is such a perfect image of the US campus culture... We don't live in utopia and the chosen topics just show how economics even works with problems that are real and hard to solve.

[@calebesevero2669]

Excelente vídeo ! Sensacional explicação 😀

[@safdershakil2401]

in this buyback the number of guns in the market remains same ,yes the demand will increase but it should also be kept in mind that the same number of guns have been returned to the government so the change in demand in momentarily.

[@collinweyand]

Outstanding

[@gauravmohan9271]

Very informative

[@yunzhuzhang2936]

Question: does the slope of red demand matter? It confuses me because we usually shift demand curve in parallel way.

[@shashankchoudhary7907]

Because both demands are different. The second demand curve doesn't represent the increase in demand from potential slave owners; it is the sum of two demands i.e. demand from potential slave owners and demand from slave redeemers.

[@Jimothy-723]

@@shashankchoudhary7907 why are we talking about slavery in economics?

[@rittenbrake1613]

good one

[@laurajaym925]

Brilliant.

[@seansheridan4354]

Why is the demand curve representing potential slave owners and redeemers more elastic than the demand curve of just the potential slave owners in the example with a more elastic supply curve?

[@GetRight249]

what determines the elasticity of the supply curve for slaves?

[@MarginalRevolutionUniversity]

+GetRight249 You should check out Tyler Cowen's video here - kzbin.info/www/bejne/joCmkKF_hpqcqtU

[@GetRight249]

All clear now. This series is extremely helpful, Thank you!

[@PrateekChowdhry]

at time 2.29, the potential buyers buy only 200 slaves at increased prices (pt. C on the curve). why ? Please explain. TIA

[@MarginalRevolutionUniversity]

Great question. The reason why only 200 slaves are purchased by slave owners at a price of $50 is because the red demand curve is actually the demand for slaves from slave owners AND slave redeemers. Slave owners and slave redeemers are purchasing a total of 1000 slaves, but in order to determine how many slaves are purchased by slave owners alone, we turn to their individual demand curve which is the blue line. At a price of $50, the slave owners would only wish to procure 200 slaves. It follows that the slave redeemers, those who wish to free the slaves, are purchasing and freeing 800 slaves at a price of $50. -Mary Clare

[@BeehindALens]

But why wouldn't the slave owner want to buy thousands more slaves? Sure they would make more money because the redeemers would have more to buy?

[@yunzhuzhang2936]

Jordan Face I didn’t totally get your question but I think you should stick to the demand curve of potential owners, it reflects the how quantity demanded( by the potential owners) moves along the curve when price changes

[@acctsys]

@@BeehindALens The demand of the redeemers is limited. Budgets and all, you know. Real world stuff.

[@ThePeterDislikeShow]

What if there was a national or even a global gun buyback?

[@aaateam111]

Why is everyone complaining about slavery being used as example?

[@Jimothy-723]

why is the thumbnail a bunch of guns?

[@HopeAndrea_HFG]

Slavery and guns?! Lol, I see they were going for shock value with this vid.

[@NatashaD101]

This is a highly sensitive topic for many of us. I am very disappointed you chose slavery as the real world application when there are a plethora of other instances that would work to demonstrate these points. We get what you're saying but you're equating the lives of our great, great, great grandmothers(fathers) to items available for purchase.

[@makaila3932]

This is extremely in appropriate. Who thought this was a good idea??

[@arthurdekker9536]

Why didn't you just use the reducement of guns. it would be way more appropriate for schools that wanna use your example (which is good), and the example would relate to a serious problem in the US. You could've made so much more money of this. just saying

[@jotham1397]

more/less *price elastic

[@wghost1]

That example turned me off

[@liamhoward2208]

Come on brah. Why is the supply of guns “very” elastic and not just elastic like any other example?

[@seansheridan4354]

Because of the small geographic scope of the increase in demand. It's a single city, and within that, buybacks usually only take place at a single location in that city, a table set up by the sheriff's department for example. The smaller the geographical area in which the demand increases, the greater the elasticity of supply. Had it been an entire state or country, the elasticity would have been less. But in this case, it's pretty much the smallest geographical scope imaginable and hence the perfectly elastic supply curve.

[@andrewcbuensalida]

sneakers and guns are not similar because sneakers are a necessity. Whereas you can live without a gun. And just because you have an old gun in your closet, it doesn't mean you're going to buy a new one if you sell the old one. Maybe because demand has changed. Maybe people are less violent. I like the buyback program.

[@christopherdavis4823]

+Andrew Buensalida Yeah I would imagine sneakers to be more of an inelastic good. Further, markets do not take into account accrued goods, or goods that are just sitting in my place. It is true that a gun buyback program would probably not change the number of guns that people buy or that sellers sell, but it might lower the number of guns in total that exist in a location.

[@Explorer982]

Andrew Buensalida the issue is, what do most people do though. That why you evaluate the public policy

[@Azhucabomb]

You can live without sneakers but, sometimes you can’t live without a gun. think about that for a second

[@haweyorashid9419]

emotionally, this is hurting me I cannot concentrate couldn't you use different subject bside slave this is a horrible

[@kyh6767]

what a loser

[@NatashaD101]

i completely agree, brother.

[@SB33Zy14]

they really used slaves tho

[@agguman]

Y'all could've picked a different subject.. But "Slavery" ?????? come on... -_____-

[@LaFacedera]

What's the problem? Now you understand the topic better.

[@kabatake]

i agree. racially insensitive to the diversity of the american people.

[@Azhucabomb]

Sing Kwok I think Americans have been trained to be overly sensitive

[@dasd120]

slaves!!!!!!... . you could have chosen anything else..

[@HSP193]

That's just dumb why slavery wtf

[@megandeleeuw6028]

I can't concentrate on this video because of the aweful example.