I didn't take economics at school, but from what I heard, the dept. had some really cruddy teachers lol. There must be an economic term to describe this phenomenon. Skilled labour shortage in econ teaching xD
no, that's one specific case where the government is trying to correct for market failure. There are other reasons why a minimum price may be set on wheat
kingHD11 I would think of it like this, at the equilibrium point (where c is) that is the optimum allocation of scarce resource of the market for this commodity. Since there is a minimum price imposed by the government, the market has been distorted therefore the quantity demand (which was initially in the equilibrium) has now contracted to point a thus suggesting that the overall quantity demand has reduce. On the other hand, since there is a minimum price, the supply (initially in the equilibrium) has extended to point b. If you compare the quantity demanded and supply you'll see that S>D and the reason as to why it is the triangle is because that is the difference between the demand and supply (as supply extended from c to b and demand contracted from c to a ). Hope that helps! :D
Excellent explanation .. tomorrow im writing Economics p2 ... i wish to get 80%
Great video thank you so much! My economics teacher is fucking shit so you really help
same thing to my eco teacher lol
bro same
you wrong
I didn't take economics at school, but from what I heard, the dept. had some really cruddy teachers lol. There must be an economic term to describe this phenomenon. Skilled labour shortage in econ teaching xD
Could something like this come up relating to Scotland's min price on Alcohol?
seems like there isnt much analysis on the benefit of minimum prices
Great video!
Just one question, can a minimum price cause positive externalities? Because demand is low and merit goods are underconsumed?
why would firms not keep excess to supply and halt production til excess supply is loss then operate supply at new equailbarium
3:16 - I take it with the Store, Burn and Dump solutions, you are not taking about the excess supply in the labour market? 🤨
Could you use a 'maximum quantity' like he explained the EU does, and then draw a vertical line on Q2?
hi,just wanted to point out that u used wheat for minimum price isn't minimum price normally set for demerit goods
no, that's one specific case where the government is trying to correct for market failure. There are other reasons why a minimum price may be set on wheat
sir with the dumping thing can we say that dumping may cause domestic producers to find substitutes abroad and cause BOP problems
anusha de silva that is a macroeconomic topic and I don't think it'll have an effect on your answer if you do mention it
how is excess supply abq2q3, because doesn't that refer to the whole rectangle not just the triangle?
The rectangle is the cost to the government of intervention buying
EconplusDal so how come you highlighted just the triangle not the whole rectangle?
The excess supply is purely the difference between Q2 and Q3. The rectangle represents the cost to the government
kingHD11 I would think of it like this, at the equilibrium point (where c is) that is the optimum allocation of scarce resource of the market for this commodity. Since there is a minimum price imposed by the government, the market has been distorted therefore the quantity demand (which was initially in the equilibrium) has now contracted to point a thus suggesting that the overall quantity demand has reduce. On the other hand, since there is a minimum price, the supply (initially in the equilibrium) has extended to point b. If you compare the quantity demanded and supply you'll see that S>D and the reason as to why it is the triangle is because that is the difference between the demand and supply (as supply extended from c to b and demand contracted from c to a ). Hope that helps! :D
Cant indirect taxes be used to reduce the excess supply? Or do govts not use indirect taxes since they would cause unemployment
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Gov would buy abP1Q1 surely not abQ2Q3??????