00:01
So here we have a story about a market and we're told two things.
00:04
We're told that the equilibrium is 10 and we're told that the price ceiling is 8.
00:09
So let's try to sketch this and see what happens.
00:12
A market is a story about prices and quantity, demand slopes down, supply slopes up.
00:18
We're told that this equilibrium price is 10 and now that we're told there's a price ceiling at 8.
00:26
A ceiling means you cannot go above, right? this is the max.
00:31
You can be underneath the ceiling, but you cannot be below, sorry, you can be below a ceiling, but you cannot be above a ceiling, right? a ceiling is a maximum value.
00:42
So up here would be illegal, and down here is legal.
00:47
So the price would like to go up further, but it gets stuck at this price ceiling.
00:53
So at a price of eight, we end up with a lot of demand, right? a lot of quantity demand because of, of the low price, but very little quantity supplied also because of the low price...