How to calculate changes in consumer and producer surplus with price and floor ceilings.

Tutorial on how the impact of price floors and price ceilings to producer and consumer surplus. Deadweight loss is explained also.
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Thank you! You explained this so well and I finally get it! Even after watching other videos and reading my text book did not click with me

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[@economicsfun]

You are very welcome. I hope it helps you pass your exams and learn a bit about economics.

[@economicsfun]

@shinenot Wow! Thanks appreciate the positive comments.

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[@chrismason8716]

These videos are very helpful, can I ask what you use in order to make these videos, is it powerpoint?

[@economicsfun]

great question! If a company charges too high of price, then they will sell no quantity. In practice the demand curve will start at 1 unit not at zero. I think that textbooks, professors and me, start a zero just make a nice straight line. Hope that helps, if not just let me know and I will give the answer another shot.

[@economicsfun]

@katkatmateo thanks for your comments. I use a variety of different tools including Illustrator, Photoshop, Flash, Motion and Final Cut. Then I stick it all together. Unfortunately there is not one single too (not that I found at least) to build good animations.

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@economicsfun great video, you couldn't make it more logical, or easier to understand. And I'm not even an economist.

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Same haha

[@katkatmateo]

Hi there. May I know what software you used for this particular video? Your effects are so awesome! =D And I learned a lot from your videos. You explain everything clearly. Thanks!

[@ivo35]

Hi! awesome video. I have a doubt though, when you're explaining the price floor with government guarantee; theres a part of the consumer surplus which goes to the producer, and then a part of producer surplus 'generated' by our tax money. But doesn't the price the government pay start at quantity demanded? In your explanation demand curve-Qd and Qe triangle remains unpaid for..! Shouldn't the surplus the government pays for include that small triangle as well? Thanks!

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Awesome explanation

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Thanks, really helpful

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good explanation !

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[@economicsfun]

Great question. Yes you are right the price the government pays is the guaranteed price (at Qd & Pfloor). What I am trying to show is the brown triangle is additional surplus that neither the consumer or producer had before. The quantity the government buys is Qs - Qd. The price the government pays is the new price floor (Pf). The government does not get any "surplus" and it is all transferred to the producer. Let me know if I did not answer your question!

[@economicsfun]

Great to hear my video is helping you. Make sure you like MyBookSucks on Facebook (see link in video description), this will help others find the videos too!

[@vishalthakurcasanova]

Well Explained .... :)

[@ahmadurrahman4076]

This is excellent . What tool have you used to demonstrate this ? Also , happens when the supply curve is inelastic ?

[@economicsfun]

+ahmadur rahman I use a lot of different tools, Flash, Illustrator, Final Cut, Garageband. It takes a long time time to create a single video. When supply curve is inelastic means the suppliers are not very sensitive to changes in price.

[@nandinizdreamworld2132]

Please say sir is consumer surplus would be a negative???

[@jiniqeee]

Thanks a million ❤

[@economicsfun]

Great to hear and appreciate the feedback. Make sure you like MyBookSucks on FaceBook (see link in video description). This will help others find the educational videos.

[@berkk1993]

perfect

[@cketchum]

Very clear.

[@bobichina]

Extremely well-demostrated!!!!! Great Job!!1

[@AsgharKhan-fd1ul]

Awesome. great. Sir, could you please explain "if the demand curve touches y-axis, meaning zero quantity at some price" How does that make sense? I mean a consumer will never pay for "nothing'. Help me please, The book i have failed to satisfy me

[@ahmadurrahman4076]

Thanks for your comment but what happens to CS surplus and PS surplus in a case where demand is elastic but supply is not ? How do you calculate the total surplus then ?

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3:40 OMG best part :)

[@abands5082]

Why does the transfer occur

[@economicsfun]

You are very welcome! Make sure you like MyBookSucks FaceBook (see description for link). We post some fun college humor stuff and links to other educational channels. Good luck in your classes.

[@economicsfun]

Great to hear good luck in your classes too. Make sure you like MyBookSucks on FaceBook (see link in video description). This will help others find the educational videos.

[@xSutherland]

thanks!

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[@katkatmateo]

@economicsfun Okay. Thank you. =)

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[@carlosyalluh]

Why does the supply curve go up? Almost every high-supply product is low in price: Apples, toilet paper, pencils, are all high-supply low-price. Cars, houses, computers, are all low-supply high-price. Makes no fuckin sense

[@paulh965]

carlosyalluh Supply curve go up because as suppliers get paid more, they are willing to supply more to the consumers. Every high supplied products are low because of the consumers. There's a certain market price that the consumers are willing to pay and that's the price that the suppliers have to settle in order to maximize the both parties interest.

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[@BoriifTube]

Suppose the market demand and market supply functions for a product are given by: Demand: P= 70- -2Q^2 Supply: P= Q^2-5. a) Find the equilibrium price and quantity (take the greater value of Q if you get two values in your solution) b) Find consumers' surplus (CS) and producers' surplus (PS) at the equilibrium price level c) Find the change in CS and PS if price of the product is set at P 52, by local governmental authority