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In the last few videos, we constructed a marginal product revenue curve for our little competitive car wash, and we essentially figured out how this is really just the demand curve for labor from this firm. I talked about on the very first video that if you know the demand curve for, in a certain market, and this is the market for labor of a certain kind, maybe the type of labor that would work at a car wash, then if you knew it from one firm and all of the other firms in the market for that type of labor, you could add their demand curves to get the entire market demand for that type of labor, for that good or service. What I want to do in this video is to make sure you understand what it means to add demand curves. Its, on one level, straightforward, but on another level, a little non-intuitive because of the ways that the axes are defined in economics, that the price axis is the vertical axis. Lets draw the demand curve for two firms. Ill do simplified versions. I wont use th
