Description 
The narrator explains the law of supply 
and the concept of supply for an 
individual firm. 
 

Audio Transcript

Narrator: When the price is right, people flock to Marge's Ostrich Burger shack to purchase O-Burgers... 

Marge: Tomorrow. I'm not makin' nuggets. 

Marge:  I'll use more of my meat to make burgers. They're selling like hot cakes!!...and besides, people will pay more for them. 

Narrator: Marge has just made a critical decision: To direct all her resources--her labor, her kitchen and her ostrich meat--towards making O-burgers. 

Narrator: Marge realizes there is an opportunity cost to making O-nuggets. Burgers are selling much better than nuggets. By making nuggets, she loses the opportunity to make more burgers, and in turn collect more revenue for the day. 

Narrator: In economics, the law of supply states that producers will make more of a product if they can sell it at a higher price. 

Narrator: In Marge's case, people will pay more for burgers than they will for nuggets. 

Narrator: If we plot the supply curve for O-burgers, we see that Marge is willing to produce more burgers if people are willing to pay a higher price for them. 

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