00:01
Hi everyone, so this is from 5 from chapter 7.
00:04
When the market is in equilibrium, the buyers are those with the highest or lowest winningness to pay, and the sellers are those with the highest or lowest costs, right? so first i'm going to show you a picture to illustrate what is market equilibrium, right? so this picture i actually i took from the textbook to show, you know, here, this is equilibrium quantity which maximize consumer surplus as well as producer surplus.
00:39
And also, there are two observations i think is relevant to this question.
00:47
So i'm going to show you in a second.
00:50
And here, so look at here, the free market allocate a supply of goods to buyers who value them the most as measured by their willingness to pay, right? at the most, because the producers, the consumers at this part cannot actually buy any goods, right? because their willingness to pay the price they are willing to pay is actually lower the market price...