You will also come to understand things like why the market outcome
is typically efficient when the supply and demand curves cross.
And why market shortages and
attendant inefficiencies can arise when prices are artificially suppressed.
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Now, after mastering consumer and producer theory and
the intricacies of supply and demand, we will move on in a series of lessons
to the broader issue of how markets are organized and structured.
This is pretty fun stuff as once we enter this world,
we will also enter the intricate world of business strategy and tactics, and
interesting tools like game theory.
In this stage, we'll see that when a market needs Adam Smith's test to being
perfectly competitive, it's invisible hand truly is a wondrous
mechanism that allocates resources in the most efficient way possible,
without any help or interference of the government.