00:01
Okay, so our analysis is going to be based here with the petroleum that the us market demands, but us consumers rather demand.
00:15
So if the us currently imports about half of the petroleum that it uses, the rest of its needs are met by domestic production because the price of oil rise such that the us would be made better off.
00:28
Okay, so we look at some conventional supply and demand curve.
00:36
So we have our demand and we have our supply curve here.
00:42
So we look at a scenario where we have the equilibrium price in this regard, just call it po and equilibrium quantity q.
00:57
All right.
00:58
So basically if the us is importing half of what it requires, then it simply means that the international price, suppose, is here at p1.
01:17
What it simply means is that the us is importing a quantity of q1 when it actually needs a quantity of q1 when it actually needs a quantity of our q2 in its market.
01:41
Okay, so basically this amount, the difference between the quantity one, i mean q1, meant to write q1 and q2, if the united states were to basically rely on the imports, then it means it would only have a shortage why because it would only be able to import q1 instead of q2 because it is just the the lake of supply at that particular price that it requires the oil or the petroleum so basically what is currently happening is that the us is importing half which is q1 but requires q2, which is what it needs, what the consumers desire...