00:01
So here we're thinking about the world price falling, right? china is doing things, and that means that the world price is falling.
00:09
So first of all, let's think about the united states.
00:12
So the united states is a market for clothing, quantity and price.
00:17
It has a domestic supply.
00:18
It has domestic demand.
00:20
But it must be the case that this is the world price, right? let's even draw that a little bit up there.
00:27
So this would be the world price because at this world price you see that quantity demanded is greater than quantity supplied.
00:36
So that gap would be equal to the imports, right? so when you have a lower world price, right, the world price is falling, we end up at a different point.
00:48
So here, what's happening, right? this will be the quantity demanded.
00:52
This will be the quantity supplied domestically, and this is going to be imports.
00:57
So consumers are very happy here, right? they get more q at lower p.
01:10
Great for consumers, right? really good for consumers, right? remember, look at the consumer surplus.
01:15
The consumer surplus was originally this triangle, right? that triangle in blue.
01:22
But, right, that would be my consumer surplus triangle.
01:24
But now the consumer surplus triangle is expanding, right? it's expanding because the price is falling.
01:31
Consumers are much happier, much, much, much, much, much happier.
01:35
And consumers are getting this extra consumer surplus...