00:01
Let's take a look at the concept of price ceilings and how they impact quantities demanded.
00:09
In this example, we're told that there's a price ceiling of $40 per ticket imposed on classical music concerts.
00:15
So i've drawn for a supply and demand curves for these classical music concerts, and we'd like to know if this price ceiling of $40 a ticket would increase or decrease attendance.
00:25
Given what we're looking at right now, we can see that we have an equilibrium at price p0 and quantity.
00:31
Q0.
00:32
So this price ceiling of $40, it's going to depend upon where this lands on this equilibrium or on this supply and demand curve.
00:41
So let's suppose that our equilibrium price for this case, let's suppose we have an equilibrium price of $30.
00:51
Let's suppose that that's what we're at.
00:53
So now if this price ceiling of $40 is implemented, that means it's going to sit above that current equilibrium, $40 at $40.
01:01
Here.
01:03
And all of a sudden what we're going to see here is that supply sits over here while quantity demanded is all the way over here.
01:09
So all this is really saying is that the classical music concert coordinators or whomever is charging the price.
01:17
That means they can charge $40 if they would like, but demand is going to go down from q0 to q1, let's say...