00:01
Here we're taking a look at a couple of basic supply and demand concepts.
00:04
There's surplus and shortage, and we're going to determine depending upon where our price is at relative to our equilibrium, whether or not we would expect to experience a surplus or shortage.
00:15
So let's start with this first graph on the left -hand side.
00:19
We want to set our price above the equilibrium to determine if there's a surplus or shortage.
00:23
So we can see that our equilibrium occurs where our supply and demand curves intersect.
00:27
So our price at the equilibrium would sit right in here at say p0, and our quantity at that equilibrium would be q0.
00:39
But let's suppose now that the price is set somewhere above, so that could be anywhere above that line.
00:45
And let's say that that exists right in here at p1.
00:49
Well, now all of a sudden, we don't have an equilibrium that we're crossing through.
00:55
Instead, our demand is sitting right here.
00:58
So our quantity demanded is all the way down here.
01:03
And our quantity supplied is instead right here...