00:01
So here we have a market, right? and first i'm going to draw it without the price floor.
00:06
We just have a regular old demand and supply curve.
00:12
And we need to find two things based on the market equilibrium, right? the market equilibrium is going to be here and here, where these things intersect.
00:21
And we need to think about consumer surplus and producer surplus, right? so the consumer surplus gets value minus price.
00:31
The benefit to the consumer from participating in the market is the difference between the value, that is the height of the demand curve, how much they're willing to pay, and the price, what they actually did pay.
00:41
So the consumer surplus ends up being that triangle.
00:45
The producer surplus is a reflection of sort of price minus cost.
00:50
The producer gets the price, has to pay the cost.
00:55
And so the producer ends up something with that as surplus...