00:01
So the intuition here is that you add quantities, not prices, right? so if i demand four and you demand six, we demand ten, right? that makes sense, right? if i want four and you want six, you can actually add those numbers together.
00:27
Quantity is a physical unit that can be added.
00:30
But if you say that i am willing to pay 20, and you are willing to pay 20, pay, say, 25, this does not imply we are willing to pay 45.
00:53
Because we are willing to pay 45 for two goods, right? it doesn't add together.
00:58
It doesn't mean that we're willing to pay 45 for one good because who gets it, right? for 25, i want one and you want one, right? our prices do not add together to pay 45, right? neither of us will pay 45.
01:13
It just the price 45 doesn't work for anyone and nothing happens.
01:17
So you can add quantities.
01:18
So if you have, say, quantity demanded is equal to 6 minus q and quantity demanded is equal to 4 minus q, you can add these to get quantity demanded for the market is equal to 10 minus 2 q.
01:34
This, oh, that should be price, right? because quantity demanded is a number of units.
01:41
But if you have an inverse demand curve, that looks like price is equal to 6 minus q, price is equal to 4 minus qd, you cannot add...