00:01
All right, here we are doing problem number 10 from chapter 3.
00:03
It's asking us, does a price ceiling increase or decrease the number of transactions in the market? why? what about a price floor? so here we've drawn a price ceiling.
00:13
I've gone ahead and done that for you.
00:14
And here on the right is a price floor.
00:17
I've gone ahead and assumed that this is going to be a price ceiling that affects equilibrium and got ahead and assumed that it's going to be a price floor that affects equilibrium.
00:24
Of course you have a price floor down here not going to affect equilibrium or a ceiling up here that's not going to affect equilibrium.
00:29
Room.
00:30
So onto the ceiling on the left, when you implement the price ceiling, you're making the price such that it can't go any higher than here.
00:43
And remember, quantity supplied is here and quantity demanded is here.
00:49
So let's say, you know, you can see people demand a much higher number of whatever good than the number supplied.
00:55
However, in spite of this excess demand, and the number supplied can only be this because even if 100 ,000 people want something, if only 50 ,000 of it is available, while only 50 ,000 is going to be sold because, you know, you can't sell that much.
01:12
So the number of transactions is going to go down...