Supply and Demand

Supply and demand! We've all hear these terms before, and we probably have a pretty solid conception of what they mean. But let's formalize them a bit by looking at the law of demand and the law of supply, as well as the substitution effect, the income effect, and equilibrium price.
Script by Matt Beat: / iammrbeat
Animation by Ignacio Triana: / unraveled
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[@Brickzot]

We demand that you supply us with more videos.

[@ugestacoolie5998]

lol good one

[@Liv-0711]

This is actually a great example of supply and demand! As more people subscribe and watch his videos, he is more inclined to create videos more frequently. This also could represent the subjects of his videos; If he makes a new video series and notices there are fewer views than expected, he would create less of that content. Similarly, if he notices a video series, such as this, that is doing well, he will create more of that content.

[@duckityyt9535]

Nah 💀

[@joiscode3832]

I honestly watch these during no school and like it

[@joiscode3832]

@@slevinchannel7589 yah

[@inferno1030]

You explain very good

[@tr3ynag4ta]

This whole video made this easier to comprehend than reading a textbook. Big thanks Dave! 🙏🏿

[@RF_N]

this guy taught me more than school did

[@noel7777noel]

No where does it say in the equilibrium of normal supply and demand math chart is kickbacks for investors. Creating a misappropriation of funds in the math. A bait-and-switch in math formulas; from kickbacks to "grow a company" to kickbacks to "build personal wealth". So investors are completely messes up normal supply and demand. As in, investors need to be Arrested. As in the Glass-Steagall Act. The investors stealing the credit the overpaying customers deserve. The "Investors" with their thumb on the scale. Customers overpaying is where investing comes from. Let me be clear; Investors need to be arrested for messing up the normal supply and demand math chart. Not even close the investors are supplying the resources. The overpaying customers are supplying the resources. And are not to be touched by investors. And since normal supply and demand states "profits" AKA kickbacks gets re-invested. The "labor" is re-invested. Thus no "borrowing/lenders" of labor are required. No profits ever where removed, to need replacement. Just like Walt Disney used the profits form Snow White to grow the company to satisfy the demand of the paying customers. The paying customers supplied the funds. This is the math equation of normal supply and demand math chart. The high demand catches a bigger profit, thus funds the growth of the bigger company needed. The overpaying customers provide the job growth. No borrowing is need because the customer are overpaying because of the supply shortage. An equilibrium that no borrowing is required. Let me be clear, normal supply and demand math chart has an equilibrium that must not have investors lending. Investors screws up normal supply and demand and turns it into supply side economics. The companies building the wrong supply chain that the customers didn't have a demand for. In a thumb on the scale, the investors are after profits. The job creation profits that came from the overpaying customers. And the thumb on the scale investors are trying to take the credit for the customers overpaying.. The investors sealing the credit the overpaying customers deserve..

[@SOSplaylist1]

Thank you for taking the time to make these videos and providing such a wide spectrum of learning material. You are are skilled teachers that speaks in a clear and concise way.

[@krishnannarayanan8819]

Putting Price on the x-axis and Quantity on the y-axis made so much more sense than how we learned it in school. I was trying so hard to understand and this made it much easier (maybe because I am a science student). Thanks Professor Dave!

[@elljorgo]

Dave is unreal... How can someone master so many topics... One of my fav channels! 👌

[@LiberalsGettheBulletToo]

Writers.

[@glennpearson9348]

Love this series. I'm betting the next one in the series will include the term "elasticity."

[@2ahdcat]

This explains ammo prices right now (and availability)

[@glennpearson9348]

Real and perceived supply both have bearing on the market price. For example, when someone says, "They're coming for your guns!" some people actually believe it, so both the demand and price for guns skyrocket. That's the fun of a free market. Prices can change based on how people feel, not just actual supply and demand.

[@2ahdcat]

@@glennpearson9348 These... are things I already know, BUT instead of giving You shit about it? I thank You for explaining it for others so I don't have to 👍

[@WetDoggo]

Not a good time for a killing spree 👌 We'll the best time is never anyways

[@RyanMcIntyre]

@@glennpearson9348 Spot on! 👏 The gun people caused their own shortage and inflation.

[@2ahdcat]

@@RyanMcIntyre As a gun person myself? That's partially correct. The main thing is all the fear mongers in the 2A community. "Ermagerd! They comin' fur are gunz!" every two seconds...

[@jima4513]

these videos are so entertaining during summer I feel like im being taught in the actual right way since the greek education system is not the best to say the least

[@ChillStreamsLive]

A very good presentation! Very professional and well explained.

[@johnholme783]

Simple no nonsense explanation! Thank you!

[@nektu5435]

Some people prefer to consume (demand) pseudoscience - James Tour offers a bountiful supply. I prefer to see pseudoscience get dunked on - Prof Dave is my supplier.

[@cicik57]

yes it is one example why market model is irrational. Imagine tha same stuff in validating the "quality" of goods, like market proponents usually say

[@snehabansal3772]

Don't get discouraged by less likes...few people come to utube to study.... please keep making vdeos for the regular ones... we're never gonna let y discourage bcz watever fam you have....you have it for permanent 💗💗

[@sciencenerd7639]

Thank you for the video. I hope you are having a good summer.

[@youritake8618]

Im surprised he didn’t say the word inflation even once

[@ProfessorDaveExplains]

That's coming later!

[@alexalbuquerquerodriguesal108]

@@ProfessorDaveExplains And good Lord that will be complex, can't wait to see It.

[@alexalbuquerquerodriguesal108]

@@reubenmanzo2054 Yep, that pretty much sum It up, although that doesn't necessarely represents reality (cof cof money supply of the US cof cof), the model for inflation I saw was on macroeconomics 2 where you have to take into consideration employement level, capital supply (productive capital, not money supply) and marginal costs on the economy; long story short, the agregated offer is quite problematic to explain long terms effects (we came to that based on a research on South Korea development betewen the start of the Korea War until the late 2000's), but the agregated demand It's actually really good (when we did another research on Bolivia raise of income betewen 2006-2008 [can't quite recall] and 2012; It's a really funny story, we choose the country at random and a few weeks later It was all over international news because of the coup [not sure we can call that], suddently our research was one of the most anticipated researches on class It was wild)

[@thomasneal9291]

@@reubenmanzo2054 post wwi Germany called to say hi... well, they WANTED to, but a phone call from there cost an entire wheelbarrow full of cash.

[@royalfinest]

There's a special curve for that. It's called steep learning curve. LOL

[@matejabrkic7747]

Frankly, if a slices price increased I wouldn't buy fewer slices, I wouldn't buy it at all.

[@thomasneal9291]

...and oddly that doesn't ever cause the price to go down now, does it? instead, they will change the supplier and just charge MORE.

[@princessleorie8786]

thank you sm! It helped me finish my project :3

[@planetearth2249]

Can we just mention the animations of the text and pictures and whatnot are simple and amazing?

[@samarth6035]

Great video sir

[@GodKitty677]

Do you know of a video on the logical flaws and probelms with Supply and Demand? I am looking for a good one.

[@EnzoVinZ]

My ECON professor made a strong point that demand is not about the desire and the willingness to pay, rather it's based on affordability. He can desire a Ferrari and willing to pay $200k for it, but the question is, can he afford it? The Ferrari will stay at $200k price regardless of how many people desire and willing to pay for it because Ferrari is catering to the market that can afford it. Only purchased products shifts the price in the economy -- his desire and willingness to pay, but cannot afford it, does not. In other words, an actual sale shifts the price. This is why highly desired items going on sale goes out fast because many consumers can suddenly afford it.

[@zafadoodle]

this man does everything

[@pprandomnpz]

That works when the products are more or less optional goods. Supply and demand work well in a very naive scenario but reality is that companies can make price changes without much risk for them but it can seriously harm consumers. We don't live in the '50s anymore, this stuff is highly manipulated and studied, usually against the consumer. What happens if the water supplier decided to increase the price twice fold? Would you stop paying and using water? Even if half the people stop paying for the service they'll still make the same money but now half of the people lost access to clean water. Or internet providers of wich, unless you live in a relatively big city, you probably will have access to only one company. Or how supermarkets inflate the prices of everything several times what they pay the producer. Or universities and higher education wich simply ask for extorting amounts of money to allow people to get a degree. To that you can add electricity, healthcare and many other stuff. Not forgetting the fact that most of these price forming companies usually avoid taxes by claiming residence in some tax heavens but are quick to ask for bail outs at the drop of a hat. A lot also tend to have horrible known work policies (sometimes actual slavery) and will make business appeasing autoritarian goverments while screaming for freedom and rights when someone touches their asses. And that's not even mentioning the corporate media wich can, and does, manipulate democracies everywhere.

[@zxk]

That's where competition comes in if a provider raises the price for no reason consumers wouldn't just stop consuming they would all switch to another provider that didn't raise their prices while providing the same quality of service, and if there is no competition or only 1 provider for internet in the area like you mentioned then that market isn't profitable for example do you think it's reasonable for an internet company to provide me an internet line I the middle of the desert far away from any major living areas and me paying the same as someone in an urban city. Also if the price doubled for no reason I really doubt 50% would still pay for the service.

[@pprandomnpz]

@@zxk No, competition is not always possible. That's extremely naive and short sighted. Services, specially, require huge ststems of distribution that you can't just come up one day and build them. Think in the case of water or electricity the ridiculous amount of networks you need to build just to compete, it's doesn't work (where would you even build all those things even if you could). Do i have to remind you too how big companies operate as well? If you start a competitor they'll reduce their price in that zone or offer months trials and such, wich will not affect the company's bottom line at al but will obliterate any upstart competition, then they buy the competition for pennies and start again rising their prices and shitting on customers. Supermakets and such will rise their prices but instead give you coupons or points you can spend, wich will basically force you to use their services again or lose them. So any small business will not stand. You also have a very first world mindset, where there's so much money around that you could bottle your farts and still make a living out of that. Extreme neo-liberals think that they can apply the same logic to small buisnesses and big corpotations, when in reality those are very different entities and function very differently. The free market doesn't exist, the market is ruled and manipulated by a few, that's just how it is.

[@thomasneal9291]

@@zxk "That's where competition comes in" oddly, americans don't seem to like the idea of competition (nor does the rest of the world apparently). they prefer to support monopolies, and have proved this time and time again. oh, and De Beers says hi.

[@zxk]

@@pprandomnpz the new company just has to connect it's water supply to the already existing grid you don't think that they have to dig a new pipe for every new company do you? And unless the government is restricting the market or the water is as cheap as possible there will always be new competition and no the existing companies can't buy every other company if they did that new ones will arrive and if they keep buying them they'll go bankrupt in no time.

[@pprandomnpz]

@@zxk Oh, right you conect to the existing grid, that makes sense. And how in the fuck do you tell the difference between the water that comes from one company to the other? Or electricity? Hell the grid itself is the thing the company will want to monopolize not the water plant. Big companies either buy them or run them out of the market because they have the power to do so. You can call it capitalism if you want, what you can't call it is competition or free market since it's not the customer deciding wich product to buy but rather corporate predation. Ignoring the nuances and issues that the system brings doesn't make the system flawless.

[@croutqn4550]

Hey professor Dave, could you do an episode on ayurvedic medicine? I don't know if it's true or pseudoscience, many people seem to believe it.

[@tellthemborissentyou]

Now explain why economists always plot supply and demand functions as inverse functions. For some reason they put price on the y axis.

[@ugestacoolie5998]

Hello professor dave, I have a question regarding supply and demand. When you "supply" this video, there is no way the quantity increases or decreases as everyone can watch it anytime, the price is fixed as video length, time is fixed. How can I apply the concept of supply and demand to this vidoe?

[@MJPerformance88]

Wow, so I can feel good if I get a discount and buy more. That is coherent.

[@qxakz2961]

Thanks!

[@melz71]

Hi Dave! Could you say something about the statistics and disprove the coronasceptic argument that the mortality rate was at a higher level before the pandemic than during the pandemic?

[@thomasneal9291]

all you have to do is actually LOOK at the numbers to prove what those clowns are saying isn't true. look up the mortality figures from the CDC and see for yourself. it's OBVIOUS that the corona-deniers are lying sacks of crap.

[@maitanphuc2006]

Thanks

[@dilomine1352]

Hey professor dave, i have an urgent request, can you compare the basicity of ortho para and meta nitroaniniles, thank you!

[@galileog8945]

Dilo mine, why can't you google this info? You would find meta most basic (pKa 2.46), para second (pKa 1.00) and ortho least basic (-0.3). The reasons are obvious if you have studied chemistry. This stuff is easy to find!

[@dilomine1352]

@@galileog8945 i did google it and i wasnt satisfied with the answer, all the explanations are in values of acid constants, i need an explanation on the ortho effect specifically tbh, and its still my first year in a levels

[@daksh3489]

Love it😁

[@knowledgechannelized5493]

Can anybody tell me the lyrics in the theme song that plays in the beginning

[@hadyaayub19-nn5oy]

Love your way so amazing

[@hadyaayub19-nn5oy]

Thanks ❤

[@KGBos]

I’m not sure I understand why the quantity of supply increases with the rise in price. Wouldn’t you want to boost your supply if the price per item is low expecting that customers will buy a lot of it. And if the items you’re selling are super expensive, you can decrease the supply knowing that customers won’t buy as often.

[@craphead9842]

Leon... correct

[@rudybishop9089]

Is the average age of subs on this channel 4 ? Or just public sector employees ?

[@ProfessorDaveExplains]

This is high school economics content.

[@thomasneal9291]

odd that rudy could not tell what the target audience for this content was though.

[@jalapenoandbanana]

I guess that pizza shop made too much pizzas but they got *STONKS*

[@sir.absurdisx4302]

not related to this video but what are your thoughts on jordan peterson

[@ProfessorDaveExplains]

I dunno, says a lot of smart things, says a few ridiculous things, I don't have a strong opinion about him.

[@louis9116]

One of the few channels for which I disable my AdBlock

[@Narendrapalsingh-jm6wl]

What correlation between demand and supply

[@Gboy-ri5ky]

So if I sell something revolutionary I should sell high and produce low to make high money?

[@thomasneal9291]

De Beers waves hello. if you don't understand why I am saying that, you know nothing about how REAL "economics" works.

[@ikyrie]

Legend

[@aaryajain6396]

Hey you changed your jingle! I don't know if you did it before, but wasn't it '🎶he knows a lot about the science stuff' and now it's "all kinds of stuff"?

[@ProfessorDaveExplains]

Gotta use a different one when the topic is not science!

[@aaryajain6396]

@@ProfessorDaveExplains that makes sense. Thanks for the reply. Keep up the good work! Hey, if you're looking to create videos in more languages, I think hindi would be a good choice. It'll make your videos accessible to a lot more people, specially because English speaking indians are only 18% of the population, while the majority can speak or understand hindi.

[@glennpearson9348]

@@ProfessorDaveExplains You're suggesting that economics isn't science? I imagine some economists would suggest otherwise. ;-)

[@thomasneal9291]

@@glennpearson9348 most economists pretend to science. in reality, at best they maths. they do NOT science. it is unfortunately how trickle down "economics" came to be.

[@chii6050]

yay

[@xanthumledodnum2603]

good job Dave! I want to donate, how can I do that?

[@ProfessorDaveExplains]

PayPal is very easy! Also patreon

[@jolieladieiz9349]

Hello, I am watching you with great love, but since I am a Turk, language support is not enough. For this reason, I suggest you consider the subtitle option, please! I'm sure you will see an increase in your audience, sir, because no country's education system is perfect and this game looks like a puzzle. The pieces are open to the world, i just can't see.

[@kirillazarov6865]

Dude! You're like Jon Snow who knows a lot!

[@taylorlibby7642]

Awesome! Now explain to me where quality fits in there! ; )

[@smilo_don]

That's the thing you sacrifice to increase supply without increasing cost, then you put what you gained ignoring quality into advertisement to try and generate demand.

[@taylorlibby7642]

@@smilo_don Ah! I knew there was a reasonable explanation! 🤣

[@funkydiscogod]

That falls under the "substitute goods". When the price of a good or service increases, a consumer will substitute it for a lower quality alternative.

[@RemyVerran]

Clever, you made an entire video about elasticity, without saying the word elasticity. You basically just taught calculus without anyone knowing they were learning calculus. Smith talked about this in terms of both goods AND labor, but I feel like the concept of inelastic labor falls short on the traditional capitalist mindset. "Anyone can be replaced", inferring labor has no elasticity, which is obviously false as different skills have different income ranges.

[@ShonyceeShenanigans]

Thank you.. more economics... micro

[@ProfessorDaveExplains]

Check my economics playlist.

[@zhess4096]

Suprised that this didn't include utility and and it's marginal value, but I'm an econ major

[@markl9196]

Please start debunking Earthing/Grounding please!

[@ie2adm212]

Supply and demand. That's why the labor shortage in the USA brought a dramatic raise of wages. Except, it did not. Red thumb.

[@goatfood1504]

It literally was the demand dropped below the supply. It doesn’t matter what caused it it just happened. I can tell you are thinking very emotionally because you think supply and demand is “good” and the job shortage is “bad” and you are implying he is trying to drag capitalism. This is like yelling at a news station for reporting on a murder committed with a hammer because you like hammers. It is so dumb on so many levels.

[@krishorst4734]

Prof' Dave, I know its way beneath you, but could you please, PLEASE do a little expose on the channel called "mudfossil university"........it is just to good to be true.

[@benquinneyiii7941]

Fundamental

[@zhraaqader2985]

حلوو💘💘

[@ryan89554]

Thats why there is no gpu's in stock and are double the price ha

[@pethaudiddorol]

The food options are so... Seppo 😂 great content though

[@johannesprotiwa4300]

This does not refer to the job market at all. The demand and supply don't find an equilibrium, when looking at mostly undesired jobs. The demand for nurses in nursing homes rises, but the supply doesn't really rise...

[@ProfessorDaveExplains]

Supply and demand refers to goods and services, not the job market.

[@johannesprotiwa4300]

@@ProfessorDaveExplains thanks.

[@zapfilmsyt]

0-0

[@tateseacrest4609]

This is why it's bad to buy a gas car you're subject to supply and demand

[@nerdwisdomyo9563]

Now i just really want a slice of pizza

[@AverageAlien]

this is capitalism 101. The only working economic model currently in existence

[@zapfilmsyt]

U-U

[@mohammadabdulhai8087]

I think you are from champion" Italy" Right?

[@WBT_1995]

I wouldn’t buy a slice of pizza if it were $2 because I can buy 8 slices for $5 at little ceazers

[@Akotski-ys9rr]

I wouldn’t buy a slice of pizza for $2 even if I wanted it lol

[@ericphantri96734]

The law of substitution change everything but the bank prevent the people to substitute like they want replace gay and lesbian for your spouse's why not let lovedoll available for example

[@allenmarkham]

I believe you'll find that labor is just another example of 'supply and demand'. Which should be kept in mind as we raise the minimum wage.t

[@thomasneal9291]

nah, it doesn't work like that. really.

[@frankmccampbell3377]

We Kick Butt Everyday, Yeah

[@ultimocontrole9980]

How much we should pay for something? How much u are willing to get explored and underpaid for your work?

[@subhuman3408]

I don't get it. Diamonds are expensive because they are rare (less supply) and beautiful (highly demanding)

[@craphead9842]

The Law of supply.....surely you will sell less and make less pizza because people won't pay more for a slice of pizza... That makes sense...Also inflation is created by the rich men and women who are greedy and not by thin air..

[@harshjoshi7949]

I am no 1

[@j2323j]

I want pizza now

[@straatzz5388]

please do another flat earth video

[@happyhippo4664]

I miss your flat earth debunking. They were so good. The demand is high but the supply is low. I totally understand why you don't want to. Spending too much time listening to their nonsense makes one's brain hurt.

[@happyhippo4664]

I agree. He just did the debunking so well. But to listen to his antagonists' derisive commentary of his debunking videos made one cringe. Their misplaced confidence was the textbook definition of Dunning-Kruger.

[@thomasneal9291]

what is left to cover even? It's exactly like creationists. their arguments are easily dismissed in less than 30 mins, and they haven't made any new arguments in over 30 years. what the fuck is there left to discuss? take what you have learned already and DO something with it. call your legislators and tell them to publicly denounce flearthers and creationists. do that and stop wasting your time watching videos continually debunking the same crap over and over again.

[@BluntTrauma621]

Yes, the rich will eat real food as they will be able to afford it and the poor will starve or eat bugs. Ugh.

[@elljorgo]

We're bound to an existence solely based on cocaine!

[@fracapolligummala3548]

Very oversimplified which just vagely correlates with reality.

[@pedropaulofaria6126]

Here comes the Economy flat-earthers AKA socialists.

[@pedropaulofaria6126]

@@danieljliverslxxxix1164 yes, and?

[@pedropaulofaria6126]

@@danieljliverslxxxix1164 haha sure buddy

[@pedropaulofaria6126]

@@danieljliverslxxxix1164 i have better things to do instead of arguing with randos in the internet

[@thomasneal9291]

hey, I live in a socialist democracy and it works quite well, thanks very much. oh, also? you're an idiot unable to separate totalitarianism from socialism.

[@thomasneal9291]

@@pedropaulofaria6126 " i have better things to do instead of arguing with randos in the internet" sure you do. sure you do.

[@prof.crastinator]

Your thumbnail is like fingernails on a chalkboard. A linear curve?

[@xl000]

Your channel would benefit from some rebranding, especially a less silly intro.

[@nacnud_]

Dave, stick to science mate. You're great at that. You didn't define price at all. Just that it's best defined at the equilibrium point. That doesn't tell us why the piece of a banana is a proportion of the price of an Audi. Try again.

[@ProfessorDaveExplains]

That's in another tutorial, bud. Cool your jets.

[@zxk]

lol because the supply for a banana is higher than the supply of Audis, did you even think before commenting?

[@nacnud_]

@@zxk I think you may have missed the point. Stick with it though.

[@zxk]

@@nacnud_ the video is tilted supply and demand if you're looking for anything else in it I think you're the one that missed the point fam.

[@thomasneal9291]

@@nacnud_ "I think you may have missed the point" and I think YOU did.