馃攳
Lecture-13 Supply: Effect of Substitutes and Complements - YouTube
Channel: unknown
[0]
[Music]
[10]
[Music]
[12]
now earlier in the demand context we
[17]
talked about complement in consumption
[21]
and substitute in conjunction I didn't
[24]
use the term in Konya but now we need to
[27]
distinguish because when we talk about
[29]
complement and substitute we have to be
[32]
clear whether we are talking about the
[34]
demand side or the supply side just as
[37]
convinced and if it is not mentioned
[39]
that whether it is demand side or supply
[41]
side you should take it as demand side
[44]
that's why I didn't mention the in
[46]
conjunction part but when you are
[48]
talking about substitute and complements
[50]
on the supply side you should always
[53]
mention it that it is for the supply
[56]
side so what do we mean when do we say a
[59]
good is complement in production or
[62]
complement in supply let me write it
[67]
good X is a complement in supply
[79]
- good why if an increase
[99]
good X is a compliment in supply - good
[102]
Y if an increase in price of good-y
[108]
increases
[115]
the supply of good X and similarly good
[124]
X is a substitute
[164]
so we are talking about good X and good
[166]
Y could X n yr complement to each other
[169]
if an increase in price of good-y
[172]
increases the supply of good X and their
[176]
substitute if an increase in price of
[179]
one good decreases the supply of the
[183]
other good can you give me an example
[186]
first substitute think about it plastic
[193]
chair - Aaron J again think about it we
[196]
are talking about supply side not the
[198]
demand side so don't think from a
[200]
consumers perspective but think from a
[203]
seller's perspective one example let me
[206]
give you from very low tech to very high
[208]
tech the simple let's take let's say
[213]
that here supplier of milk the milkman
[216]
he supplies milk okay let's say that
[220]
there is a market for cow dung also
[222]
earlier when our economy was not
[224]
developed cow dung was quite popular
[225]
mean means to get energy to cook food ok
[230]
so let's talk about that example so
[233]
let's say if there is an increase in
[235]
price of cow dung what would happen
[245]
your willingness to supply milk at the
[248]
same price would increase why think
[251]
about it
[252]
price of cow dung is increasing you want
[255]
more counter to get more cow dung what
[257]
do you need more cows more cows means
[260]
more milk so you will be willing to
[263]
supply more milk at the same price so of
[267]
course here Cowden and milk are
[269]
complement in production so that's a
[272]
very low-tech example let's talk about a
[274]
very high-tech example Boeing Company
[276]
Boeing is a manufacturer of airplanes
[280]
it makes civilian airplanes as well as
[283]
military airplanes now Boeing uses the
[288]
same assembly line or same workshop to
[292]
make civilian as well as military
[294]
aircrafts so if there is an increase in
[297]
price of military aircraft what would
[300]
happen boeing devote more space to to
[304]
manufacturing in to manufacture military
[307]
aircrafts what would happen to the
[309]
supply of civilian aircraft it would go
[311]
down boeing willingness to supply
[315]
civilian aircraft at the same price
[318]
would decrease so that's why here
[322]
civilian aircraft and military aircraft
[324]
they are substitutes in supply or
[327]
substitutes in production so be very
[330]
careful these are confusing term you
[332]
have to be very certain that whether you
[334]
are talking about demand side or the
[336]
supply side is it clear okay so now we
[340]
have enough knowledge so that to talk
[343]
about the factors affecting the supply
[347]
schedule or supply function
[351]
[Music]
[369]
[Music]
Most Recent Videos:
You can go back to the homepage right here: Homepage