00:01
Looking at the competitive market equilibrium, what we see right away is that it occurs at the intersection of supply and demand.
00:07
We want to know exactly why this occurs.
00:10
And this is helpful to look at if we start to figure out where the equilibrium would lie if the price had differed.
00:18
And so let's suppose that the price were higher.
00:20
So suppose we're dealing with the price up here.
00:23
And instead of at p1, we're at p2.
00:26
Well, in this case, what we can see is that our supply is much greater.
00:31
Than our demand.
00:33
Meaning that consumers really have no reason to pay more for what they're getting because it's already so widely available.
00:40
So the consumer is probably going to be unwilling to pay this higher price for so much of the product that they see available...