00:01
Okay, so today we're going to be talking about the law of supply and why it is upward sloping.
00:06
So if we think about a perfectly competitive market where we can have many, many business entrance, depending on factors of supply and demand, we can describe the positive relationship between price and quantity supplied by considering individual incentives or individual companies, right? so say just for example that, let's say this is like the market for pizzas or something like that, something arbitrary.
00:35
Say that the market price is $1 for pizzas.
00:42
So this might make you think of like, i don't know, for example, i live in new york.
00:45
And so there's 99 cent pizza shops all around.
00:49
Right.
00:49
And they're able to do this because they're able to negotiate special prices with manufacturers and their legacy institutions that many people come to.
00:56
That they're actually able to sell pizza for a dollar slice.
00:59
But that's not very common, right? and so only a few people are able to do that.
01:05
And so if the price is really a dollar, you might see some people in the market, but that's not enough to sufficiently incentivize many people to enter the market and sell pizzas...