I understand that it works by measuring the amount of carbon 14 which has different amounts depending how old the matter is. But how is it known how much carbon 14 there was that long ago? Is it just that is takes x years for this much to decay so 104 x yea ago they figure it out on a simple graph?
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Carbon-14 is constantly being generated in the upper atmosphere. When cosmic radiation hits Nitrogen it generates Carbon-14. And because this process is fairly constant and the half life of Carbon-14 is constant this means the system reaches an equalibrium where the amount of Carbon-14 in the atmosphere is fixed. There are still a lot of pitfalls when interpreting the results of the Carbon-14 dating which is why this is its own branch of archeolagy with highly trained specialists.
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