Hundreds of progress of elevator vehicles are under-development. Thousands of orders and conditional orders have been placed by either Blue Ship or startup customers and billions of euros, US dollars, or E1 are being invested in this kind of vehicles in order to have this industry off the grounds, but will it take off? What are the conditions that are needed for having this industry reaching in the skies? In this course, we are going to address some of the issues that are needed to understand these aspects. They're going to be presented in a way that they're going to mix some technical, theoretical, and some practical aspects that are needed for understanding the whole picture. One of the first aspects that's needed for understanding this subject is to go back to the very basic theoretical building blocks of economics or better set of microeconomics. When you people close your eyes, and you imagine what image best represents the economic theory, maybe the Cartesian coordinate systems with the vertical axis, composed by the prices and the horizontal axis comprising the quantity of the goods, the firms and the consumers they are able to put on the markets. Maybe this is one of the most basic images that people can have. You have one upward curve of supply and also you have one downwards curve of demand, then you have one intersection and in this intersection you can reach the price of equilibrium and also the quantity of equilibrium. This scheme is very much present in the mind, even of laypeople. You don't need to be someone with a very strong background in economics for having this image in your mind. One fact though that these two curves, the supply curve and the demand curve, they can present a wide array of shapes and relative positions. In this sense, the perfect cross and by the perfect cross, what I mean to say is that cross that have some instance, some straight angle formed between the two curves. It's just one among several possible cases that can be presented in a real case, in a real scenario, what I mean to say is that the supply curve can present slight or steep slope. The same can be said about the demand curve. The demand curve can also present slides or a steep slope in this access. Moreover, the intersection can occur at lower or at higher values of both price and quantity, although of course there is also an important issue on the decision of the meaningful scale. High or low depends on the scale that someone is using for measuring both prices and quantities. Also, intersection can occur at a lower value of one of the variables. A lower value of quantity and the higher value of price for instance, or the converse, the opposite sides, again, making sense of the meaning of the scales, or one case that's really important for us to set is that it's very much possible that an intersection can simply not exist whatsoever. This is one scenario in which there is no markets. In this case, you have the supply curve line above the demand curve for all the spectrum, for all the array of values that the quantities can assume. In all of these represented cases, we can say that there is a market equilibrium if one intersection exists, either good or bad in terms of the values of price and quantity. Whatever these values they assume such equilibria, they imply that there is a viable market that clears itself under competitive conditions. In this sense, the price of demand being equal to the price of supply, and prices of supply being equal to the marginal cost of the company by assumption, you have the quantity of demand and the quantity of supply, they are equal. This is a mutual viable solution that arises for both demand and supply sides of the equation. In this sense, there is a price of equilibrium, there is a quantity of equilibrium, and this is the values that the market generates. In order to be viable, the price of demand and the price of supply they must be equal, and the quantity of demand and the quantity of supply, they are also needed to be equal. But this is just one of the possible situations a market can present. Actually, viability requires that the given quantity, strictly the price of demand is greater than or equal to the price of supply, not less. Indeed, in most of the times markets they are simultaneously viable and also less competitive than what the previous framework sets. Moreover, such less competitive aspects something that companies benefit from. In most of the cases, consumers they also enjoy provided that they perceive the value of the goods. In this case, it's described as a situation in which the company enjoys market power. In situation of the market power, what happens is that you have the values that are in the very wide range of values on the left of the price that sets in the condition of market equilibrium. In this range of values, what happens is that at any quantity that is given, the price is higher than the unit cost that the company faces. In this situation, you have a very wide range of values that are viable for the markets, that are viable for the firm, and also they denote market power for the company in the sense that the price is higher than the unit cost. In all these situations, the price consumers willing to pay lays above the minimum price companies are willing to charge, and this situation presents a marked configuration that's simultaneous, viable, and also profitable for the company. With this contents, we obtain the very basic economic indicator that we are going to be centering our discussion at. The distance that exists between the price and the cost.
