ECON 101 Lecture Notes - Lecture 1: Bubble Tea, Economic Equilibrium, Economic Surplus
!
!
Price floors Ceilings are government caps interventions
Ex Bubble Tea Suppose the gov places aprice
Geling on bubble tea to help college students
PPbelow equilibrium
Éjgnew aunt amended
new supply created
price 5lots of bubble
tea demanders can't get the
bubble teathey want ble
suppliers only produce QS
price P
Consumer Surplus
In afree mkt theres one equilibrium price that all
consumers pay tall producers earn
p
II I
Demand curves are like marginal
Pbenefit People were willing to
PA 9buy GA for PA but equilibrium
allows them to buy Qt for P
at
IiLd consumers get an
extra benefit or surplus
QA equal to Da p
Document Summary
Geling on bubble tea to help college a price students created. P below equilibrium g new aunt amended new supply price 5 lots of bubble tea demanders can"t get the bubble teathey want ble suppliers only produce qs price p one equilibrium price that all all producers earn. In a free mkt consumers pay t theres p i. Demand curves are like marginal benefit people were willing to buy ga for pa but equilibrium allows them to buy qt for p. Ld consumers get an surplus extra benefit equal or to da p. Consumer surplus extra satisfaction consumers relieve were willing to pay above p"t but only had to pay p that ble they produce extra t. I equilibrium price that all produces earn enough to will get an of only. Mkt again for bubble tea ftp. t x jfjj. In general dwls represent wasted resources the intervention cost of the is p conjurers.
