00:01
So here we've got a market, right? we're given a demand curve of q is equal to 100 minus 10p.
00:06
I'm going to invert that as well just to get us started.
00:09
Switch the p and the q over.
00:11
We get p is equal to 10 minus q over 10.
00:14
That'll make it easier to grab.
00:16
Similarly, on the supply side, we have q is equal to 10p or p is equal to q over 10.
00:23
So if i was to draw that market between quantity and price, the supply curve would start at 0 .0.
00:30
Looks something like this the demand curve would start at 10 and look something like this leading to an equilibrium the original equilibrium one is we want to set quantity demand it equal to quantity supply so we get a hundred minus ten p is equal to 10p that means that p is going to be equal to five and quantity is going to be equal to 50 so this is five and fifty now the government it's going to come in with a price ceiling of p equals three right this is the ceiling so the new equilibrium is going to be down here right this is the new equilibrium um the price can't go above three the quantity supplied is the limiting factor and so we need to think about uh for two we need to think about the quantity supplied at price is equal to three which is equal to 10 times three which is equal to 30.
01:28
So the new equilibrium is moving down towards the price ceiling, right? what happens does to consumer surplus, producer surplus, and dead weight loss? well, that's a whole series of questions, right? so initially, here was the consumer surplus, right? the original consumer surplus and the original producer surplus.
01:57
There was originally no dead weight loss.
02:00
The original dead weight loss was equal to zero because in a perfectly functioning market, you don't have any dead weight loss...