Transcript - Izzit.org

Supply, Demand and Price
2. Price and the Producer
MAN: “Lovely plums, lovely juicy plums. Get your lovely juicy plums, roll up then, roll up!” We’d
learned a lot from the market; in particular we learned how the price of what we had to sell affected the
behavior of the people we were trying to sell to, the consumers. We’d found that raising the price reduced
the amount people wanted to buy. It acted as a sort of rationing system.
WOMAN: Yeah, and on the other hand we’d also found something else. Lowering the price of an item
increased the amount people wanted to buy. It acted as an incentive. But the truth is- it isn’t only the
consumer whose behavior changes as the price goes up and down. The producer’s behavior changes, too.
And our behavior certainly changed, “Alright, come and get it, come and get it! Oh…forget it.”
MAN: It all began that day. I’d been out with the children. We’d walked further into the hills than I’ve
ever been in my life before. And just guess what we found
WOMAN: Hmmm, it really wasn’t the time for guessing games.
MAN: A cave!
WOMAN: A cave Who wanted to talk about caves when the meal they’d been cooking all morning
was stone cold- and the shawls they’d been making all week had to be got ready for the trader.
MAN: I asked you if you knew what it was made of. Well Well
WOMAN: Who cared what a rotten old cave was made of If you knew that unless we sold the shawls
to the trader we’d have no money left for food, hot or cold.
MAN: It was made of salt, dear!
WOMAN: Oh, what was
MAN: The cave! The cave made of salt, I explained, that we could sell salt on the market. I felt sure that
we’d do very nicely from it.
WOMAN: Oh, who could possibly be so stupid! We already had enough salt to last us for a month.
The trader brings sacks full every time he comes. It only costs 10 cents a bowl. We couldn’t possibly
compete with his prices. You see, we’d starve unless we could think of something better than that. It was
much better to make clothes and blankets. That way we got a decent amount of money for a decent day’s
work. You’ve got to admit I’m right!
MAN: Yes, but all the same I thought it was worth a try. After all, soon everybody would be wanting to
salt down meat and fish for the winter. So, I took my salt to the market next day. But nobody took any
notice of my salt. They said it was crazy to try and sell it at that price. I should have known, of course.
My wife was quite right. She usually is.
WOMAN: Yeah, and since one of us had to earn some money, I took the shawls to the trader. And
although we couldn’t sell our salt at our asking price, people needed it badly. There was a crowd waiting
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