La LEY de OFERTA Y DEMANDA | En 5 minutos — Transcript

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1. 0:01How’s it going, Economy Lovers? Today
2. 0:03we’re going to see what the law of
3. 0:05supply and demand is and how it works.
4. 0:11The law of supply and demand is the
5. 0:13basic principle upon which a market
6. 0:15economy is based. This principle
7. 0:18reflects the relationship that exists
8. 0:20between the demand for a product or
9. 0:22service by consumers and the quantity
10. 0:25supplied of that product or service by
11. 0:27its producers, taking into account the
12. 0:29price at which it is sold. To
13. 0:32understand the theory of supply and
14. 0:34demand, you must first know the law of
15. 0:37demand and the law of supply, each one
16. 0:39separately. And why? Because this
17. 0:42theory is the result of the connection
18. 0:44that exists between both laws. The law
19. 0:50of demand states that*ceteris paribus*
20. 0:53—a fancy term meaning if we keep
21. 0:55everything else constant—the quantity
22. 0:58demanded of a good decreases when the
23. 1:01price increases. Graphically, it is
24. 1:04represented by a downward-sloping curve
25. 1:07like this, and what we do is move along
26. 1:09the demand curve. This is because the
27. 1:12more expensive a good is, the smaller
28. 1:14the number of consumers interested in
29. 1:17buying it. For example, imagine you
30. 1:19feel like having an orange juice while
31. 1:21sunbathing at the beach, so you go to a
32. 1:26beach bar to order one. If the price of
33. 1:30the orange juice is € 1, you and
34. 1:33probably a few others will buy it. On
35. 1:36the other hand, if the price is € 100
36. 1:38, you will almost certainly not buy it,
37. 1:40unless you are already completely
38. 1:42dehydrated. On the other hand, the law
39. 1:45of supply indicates that, *ceteris
40. 1:47paribus*, the quantity supplied of a
41. 1:49good increases when its price also
42. 1:51increases. Its representation is an
43. 1:53upward-sloping curve that looks like
44. 1:55this. That is to say, when the price of
45. 1:58a good increases, the number of
46. 1:59producers interested in selling it also
47. 2:01grows, so supply increases. Let's
48. 2:03return to our juice example. If the bar
49. 2:06can sell juice for € 20 with a cost
50. 2:08of one, many people will want to sell
51. 2:11juice. Conversely, if the price is €
52. 2:141.50, many beach bars will not be
53. 2:16interested in selling juice at that
54. 2:19price and will decide to try
55. 2:20caipirinhas instead. All this talk
56. 2:23about juice is making me thirsty. In
57. 2:31other words, the supply and demand of a
58. 2:33product depend mainly on its price.
59. 2:36This is the lever that causes a greater
60. 2:38or lesser volume of units sold. The
61. 2:41goal for all companies is to set a
62. 2:43price that is attractive to the
63. 2:45customer while maintaining an optimal
64. 2:47profit margin. This happens when the
65. 2:50quantity demanded in a market equals
66. 2:52the quantity supplied at a given price.
67. 2:55This is known as the equilibrium point.
68. 2:58It is represented graphically in the
69. 3:00following way. The point where both
70. 3:03curves intersect is the equilibrium
71. 3:05point or market equilibrium. But how is
72. 3:08this point reached? To understand how
73. 3:12the equilibrium point is reached, we
74. 3:14must talk about two situations of
75. 3:16excess: excess supply and excess demand
76. 3:18. When there is excess supply, the
77. 3:21selling price of a product is higher
78. 3:23than the equilibrium price. Therefore,
79. 3:25the quantity supplied is greater than
80. 3:27the quantity demanded. Over time,
81. 3:30suppliers will end up lowering the
82. 3:32price to increase sales. Conversely,
83. 3:35when there is a product shortage, it is
84. 3:37because the price of the good is below
85. 3:40the equilibrium point, resulting in
86. 3:41what is known as excess demand. One
87. 3:44example to understand this is
88. 3:46limited-edition luxury clothing. Since
89. 3:49there are so few units of each piece,
90. 3:51once stock runs out, the lucky ones who
91. 3:54managed to get a product can resell it
92. 3:56at a higher price. Reaching the market
93. 4:00equilibrium price is crucial for it to
94. 4:02be efficient. If you want to know how
95. 4:06these prices are formed, I recommend
96. 4:08you take our course on how money and
97. 4:10prices work. If for some reason there
98. 4:16is an increase in the demand for a good
99. 4:18, its graphic representation will shift
100. 4:21to the right and we will obtain a new
101. 4:24equilibrium point. The same happens
102. 4:27with wrapping paper at Christmas or ice
103. 4:29cream in the summer. If the opposite
104. 4:32occurs, where sellers for some reason
105. 4:35decrease their production, we will
106. 4:37observe a movement of the supply curve
107. 4:39to the left on the graph, thus
108. 4:41increasing the price of the good in
109. 4:44question and reducing demand. An
110. 4:47example of this is what happens with
111. 4:49fruits and vegetables during droughts.
112. 4:52Droughts negatively affect the
113. 4:54production of these foods, so farmers
114. 4:56have to increase the price. Now you
115. 4:59finally understand why that t-shirt or
116. 5:02product you want to buy has such a high
117. 5:04price. And you, could you tell me a
118. 5:07situation where you have detected an
119. 5:09excess of supply or demand? What do you
120. 5:12think happens when minimum or maximum
121. 5:14prices are set on products? Leave it in
122. 5:17the comments. See you later. Oh.