00:02
First, the first thing we should refresh fresh refresh our self with what does equilibrium point mean.
00:09
So equilibrium is the point at which quantity demanded is equal to quantity supplied.
00:16
As we can see from this diagram, the point e here is what we call, oh sorry, is what we call equilibrium price or equilibrium point.
00:27
And when the price is above this point, see here.
00:33
So at this case, it's $1 .4 per gallon is an equilibrium price.
00:39
So if the price is $1 .8 per gallon, which is above the equilibrium press, what will happen is the quantity supplies become more than quantity demanded because of the hair press.
00:57
Firms find profitable to produce more.
01:01
As a result, production increases more than the equilibrium quantity, right? as we can see here, when the price is above it, the quantity supply is 700, where the quantity demanded is 500, it is 200 deficits between the quantity supply and quantity demanded.
01:26
Also, at higher prices, people will demand the line.
01:29
Because it's more expensive, therefore quantity supplied exceeds quantity demand date.
01:35
Keep this in mind with the surplus supplied is more with the surplus, which i mean quantity supplied is more than quantity demand date, large stock get accumulated...
