00:02
Hello, in this case we have eight different situations, so let me put all of them to this table.
00:11
So here we have part a, case one, then it will be case two, then for b, one and two, for c one and two, and for d, one and two.
00:26
And for all of them we will explore the effect on demand curve, supply curve, equilibrium price and quantity.
00:43
Okay, let's start with the first one with situation a and let me start with the first case.
00:55
This is the first case.
00:59
We always have demand.
01:02
This is blue curve.
01:04
Is demand and red curve is supply.
01:08
Okay, let's start.
01:13
This, we have the market for newspapers in part a and the salaries of journalists go up.
01:24
So now it's more expensive to hire journalists and their work.
01:32
Labor is more expensive.
01:34
Labor is one of the main inputs for any suppliers and this input becomes more expensive and we can expect the decrease in supply.
01:47
So supply decreases.
01:51
So demand doesn't change.
01:54
Supply decreases.
01:57
What will happen with equilibrium price and quality? this is initial equilibrium and this green color represent the new equilibrium.
02:09
So price increased.
02:11
Quantity as we can see decreased so price increases quantity decreases this is the first case in part a okay now we have the second case again we have demand and supply blue and red in second case there is a big news event in our town which is reported in the newspapers.
02:46
There is nothing with supply but now demand will increase because it's very interesting for people for local residents they want to know they will buy more.
03:01
So temporarily demand will increase.
03:05
We can expect an increase in demand.
03:10
So demand will increase the demand curve will shift to the right so demand will increase supply doesn't change let's look what will happen with the price and quantity so here we always have price here and quantity there i think i forgot to mention to mention price is here and quantity quantity in the horizontal axis and price in the vertical so let's look what will happen with equilibrium price and quantity they both will increase.
03:52
As we can see they both increase.
03:56
This is the second case of part a.
04:02
Okay now let's go to both cases of part b.
04:13
Now it's part b.
04:15
This is the first case and the second case.
04:19
Again we have demand and supply and we have equilibrium prices and quantity for all cases.
04:35
Okay b this is a market for st.
04:39
Louis rams cotton t -shirts.
04:42
In the first case the rams win the super bowl.
04:47
Of course now consumers they will have an incentive to consume more, to buy more because people are happy, consumers are and they want to buy more t -shirts, demand will increase.
05:07
Let me use the blue color, demand will increase and it will shift to the right.
05:16
And as a result, we have new equilibrium price and new equilibrium quantity...