Basics of Supply

This lecture covers the concept of supply in economics, focusing on the relationship between price and quantity supplied. The instructor explains how production costs influence the willingness of producers to sell goods, using an example of a real estate developer deciding how many floors to build to maximize profits. The lecture delves into the role of marginal cost in determining the optimal level of production, the impact of different technologies on production costs, and how environmental regulations can affect supply. Additionally, it discusses the market mechanism of decentralized decision-making based on production costs and price, contrasting it with a central planning approach. The lecture also touches on the concept of elasticity of supply and how external factors can shift the supply curve.