00:01
Hello, everyone, and welcome.
00:02
So what's happening here is that the government is imposing a price ceiling on tea, and it's below the current market equilibrium price.
00:10
So how does this affect the price of lemons, which are complementary goods, and coffee, which are substitute goods with tea? so let's do part a first, which is with lemons.
00:22
So a lower price ceiling, i mean, a pricing below the equilibrium implies what? well, it implies that you can get the same good for a cheaper price than what the market equilibrium is.
00:34
So essentially, what's happening is that the price of the t will decrease, which increases the quantity demanded.
00:45
Actually, let me specify, it's the price.
00:48
The price of t will decrease.
00:52
And lemons are complementary good, which means that if you buy one, you typically get the other one, too...