Transcript - Izzit.org

MAN: And there we were at the end of the day. There’d been no fights or scrambles for peaches, no
apples left to rot. And instead of the 200 cents we’d probably have made if we’d not adjusted the prices,
we got nearly 600 cents to show for our troubles.
WOMAN: It’s an unavoidable fact of life that goods have to be allocated somehow. And we’d
discovered for ourselves that the price of goods can prevent fights or long queues on the one hand, and
huge surpluses on the other. Am I right, or am I right And it all goes towards demonstrating a general
principle that applies to marketing anywhere. It makes no difference whether it’s fish or furniture, kettles
or computers, boots or books. Nothing has an absolute price or an absolute value. Take any commodity
you care to mention- no matter how ordinary. Its value always depends on the circumstances.
MAN: Take water, for example. In a country near the equator it can be very expensive, because it’s
difficult to come by. And in the middle of the desert near an oil well in a country like this, a barrel of
water can cost more than a barrel of oil. This chap is selling water and he’s doing very well. But in these
same places dates can be so common, have so little value, that scarcely anybody bothers to pick them.
WOMAN: On the other hand, there are some countries where dates are rare and expensive delicacies.
Yet in these same places, water might cost next to nothing, because it’s so easy to come by.
MAN: However, water is as essential to life here as it is anywhere on earth. If you live on the edge of a
lake you might have thousands of times more than you need, so its price isn’t high. Just because
something is high in demand doesn’t automatically mean it’s expensive. The balancing point is price. It
regulates on the one hand - supply - and on the other hand – demand.
WOMAN: The fascinating thing is: that if you go to any market or any shop, every price you see on
every single thing that’s for sale has a story to tell. It tells you, for example, how plentiful or how scarce
something is in relation to the number of people who are not only able to buy it, but are willing to buy it.
MAN: Comparing prices can tell you a great deal about different things with similar characteristics. An
avocado can weigh the same and may even have the same nutritional value as a potato, but the different
price of each can tell you how much more difficult one was to produce than the other, or how far it had to
travel and how much people want it.
WOMAN: Changing prices make another interesting story. The way the price of cherries and of salmon
changes between early May and late June can tell you a great deal about when cherries grow best, or
about how easy it is to catch salmon or when the season is open or closed.
MAN: But what price tells you about something has nothing to do with its absolute value. Price can only
tell you about value relative to a particular place at a particular time - it’s the relationship between supply
and demand.
WOMAN: It’s like a pair of scales. The price pointer is in the middle if demand is on the right and
supply on the left. When demand is great and supply is small, the pointer will move to a higher price, but
when supply increases and demand decreases, the pointer moves to a lower price. And this tells us the
first simple but important law of demand.
MAN: The higher the price, the smaller the quantity that will be demanded.
WOMAN: Or, if you prefer…
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