Micro: Unit 1.3 -- Market Equilibrium

Hey Everyone! I'm Mr. Willis, and You Will Love Economics!
In this video, I will:
- Define market equilibrium, market shortage, and market surplus
- Explain how disequilibrium is created and how natural market forces return the market
to equilibrium
- Use data and graphs to calculate changes in quantity demanded and supplied when
prices change in a market
- Demonstrate how changes in supply and demand affect price and quantity in the
product market
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[@alroygama6166]

3:35 the saddest thing ever happens😂

[@moisheni1478]

Thank you it is very simply to understand for non economic students also.

[@phetolomatome602]

Well explained Sir,I now love economics

[@mcswole4804]

Very nice, Mr. Willis.

[@afisalias8551]

Thank you for great video. Very helpful.

[@samanthanobuhledirwai412]

I'm really starting to love economics

[@instaminox]

Excellent!

[@mundheral.askari3450]

thank you !!

[@victoriazhang3413]

Thank you!!

[@arunkenta]

amazing!

[@mattdathew2794]

excellent is all I can say

[@adeleketimilehin5661]

Love this

[@JuanCortez-xn8ur]

Why is it assumed that a drop in price for an item correlates to an increase in demand?

[@deborahballinas9892]

Isn’t it because if an item is a lower price, it is usually demanded more since it is cheaper?

[@codedsavage7438]

Great

[@mmarr4081]

thanks

[@aravindarathnayake3807]

Thanks

[@claudiajahic2803]

very well explained, but why the Supply curve is not starting from ZERO and it starts from 2,3 points ahead already, or i am just looking it wrong ?

[@randyowusu4617]

The supply curve is derived from a supply function. Eg. Qs=5P With this the supply curve will begin from zero. The supply curve begins where Price(P) is equal to 0. Putting P=0 into the supply function Qs=5P If P=0, Qs=5(0), Qs=0 However if the supply function is Qs=2+5P The supply curve will begin from 2. Because if price is zero. If P=0 Qs=2+5P, Qs=2+5(0) Qs=2+0 Qs= 2 units. The supply curve begins from the quantity where Price is zero. And it depends on the supply function. Supply function Qs=a+bP Qs is quantity supplied at each price. P is the price of the commodity. a, refers to the minimum quantity supplied at price zero. +, The addition sign represent a positive relationship between quantity supplied and price. As price rises, producers offers to sell more units to increase their profit level. b, is the increase in quantity supplied as a result of a unit increase in price. Given Qs=2+5P 2 is the minimum quantity supplied at price zero. This means at price zero, producers will offer to sell only two units of the commodity. 5 means that if the price of the commodity increase by a units, producers will increase quantity supplied by 5 units. In other words producers will offer an additional 5 units of the commodity for sale.

[@rhetthart9311]

@@randyowusu4617 that's a lot of hypothetical algebra I don't like

[@jaydenleung6432]

If a market is in equilibrium, is it necessarily true that all buyers and sellers are satisfied with the market price? I have think for many days and i got some point for NO, and some theoretical points force me say yes~~ Does this question have a standard answer?

[@isabelletan7416]

This is a very late reply, but in my opinion, demand for a good or service consists of the total demand for all the consumers in the market, which would mean that at the equilibrium price, the total demand is set at a certain level by everyone's individual demand would set everyone's total utility at a certain level, and they will be able to maximise their utility by buying at that specific price. This would also apply to the supply of firms (due to different COP, I presume, but with profits instead of utility. In a nutshell, not every single consumer will be able to maximise their utility and not every single firm will be able to maximise their profits, but most of them will, but don't take my word for it, I'm rather new to Economics too.

[@isabelletan7416]

But for now, we can just say that everyone is able to maximise their utility/profits for simplicity's sake