00:01
For this question, we're given an hypothetic table of demand and supply.
00:04
I want to find the equilibrium price quantity.
00:07
I want to fill in the shortage, the supply shortage column and use it to explain why our answers are correct.
00:14
And lastly, surpluses drive prices up, shortage drives them down.
00:19
Do you agree? so we're given a table of demand, supply, price and then shortage or surplus.
00:38
And this is 40, 30, 20, 10, 0, 0, 10, 20, 30 and 40 and price is 1, 2, 3, 4, 5.
00:51
Now the equilibrium price, which is the first question, equilibrium price is at a point where demand is equal to supply.
01:00
If you look at the table, the equilibrium price would be equal to $3 because that's where demand equals supply.
01:07
For the second question, the equilibrium quantity at the point where the price is $3, the quantity is 20.
01:15
So this is the equilibrium quantity.
01:18
Now for the third part, the supply and shortage column.
01:23
Now if the supply is greater than demand, we know that there is a surplus and if the demand is greater than supply, we know that there is a shortage...