101 lecture 7 consumers producers efficiency
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consumers producers efficiencyTRANSCRIPT
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Microeconomics Lecture 7
!
Consumers, Producers, and the Efficiency of Markets
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1. What is the equilibrium price before the tax?
2. What is the equilibrium quantity?
3. If the tax is 40 SAR, what will be the new price?
4. If the tax is 40 SAR, how many pizza would be sold?
5. What will be the total revenue with the new tax?
6. How much tax will the seller pay?
7. How much tax will the buyer pay?
8. How much will the total tax be?
9. How much did the seller earn after paying the tax?
10. Why isn’t the new price 90?
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Microeconomics Lecture 7
!
Consumers, Producers, and the Efficiency of Markets
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Economic Surplus !
Consumer - Buyer !
Producer - Seller
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Value Versus Price
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Sellers value less than price
Buyers value more than price
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Surplus Value is equal to
the difference between
value and price
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Economic Surplus is equal to
seller surplus value plus
buyer surplus
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BuyersRiyadh Pizza Market
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Buyers
0
5
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25
30
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40
Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
Riyadh Pizza Market
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Buyers
0
5
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
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Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
30
35
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
3840
Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
30
35
40
Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
3638
40
Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
30
35
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
3436
3840
Riyadh Pizza Market
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Buyers
0
5
10
15
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25
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
3234
3638
40
Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
3032
3436
3840
Riyadh Pizza Market
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Buyers
0
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10
15
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2830
3234
3638
40
Riyadh Pizza Market
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Buyers
0
5
10
15
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840
Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
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40
Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840
Price 29
Riyadh Pizza Market
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Buyers
0
5
10
15
20
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840
Price 29
Riyadh Pizza Market
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Buyers
0
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10
15
20
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
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3436
3840
Price 29
Riyadh Pizza Market
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Buyers
0
5
10
15
20
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840
Price 29
Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
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40
Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840
Price 29
Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
30
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40
Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840
Price 29
Riyadh Pizza Market
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Buyers
0
5
10
15
20
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40
Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840
Price 29
Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
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Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840 Price
35
Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
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40
Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840 Price
35
Riyadh Pizza Market
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Buyers
0
5
10
15
20
25
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40
Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840 Price
35
Riyadh Pizza Market
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Buyers
0
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10
15
20
25
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35
40
Ali Abdullah Ahmed Faisal Mohammed Mahmood Sultan Turki
2628
3032
3436
3840 Price
35
Riyadh Pizza Market
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SellersRiyadh Pizza Market
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Sellers
0
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40
Dominos Pizza Hut Dr Gale
Riyadh Pizza Market
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Sellers
0
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10
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Dominos Pizza Hut Dr Gale
20
Riyadh Pizza Market
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Sellers
0
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10
15
20
25
30
35
40
Dominos Pizza Hut Dr Gale
25
20
Riyadh Pizza Market
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Sellers
0
5
10
15
20
25
30
35
40
Dominos Pizza Hut Dr Gale
30
25
20
Riyadh Pizza Market
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Sellers
0
5
10
15
20
25
30
35
40
Dominos Pizza Hut Dr Gale
30
25
20
Price 29
Riyadh Pizza Market
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Sellers
0
5
10
15
20
25
30
35
40
Dominos Pizza Hut Dr Gale
30
25
20
Price 29
Riyadh Pizza Market
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Sellers
0
5
10
15
20
25
30
35
40
Dominos Pizza Hut Dr Gale
30
25
20
Price 29
Riyadh Pizza Market
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Sellers
0
5
10
15
20
25
30
35
40
Dominos Pizza Hut Dr Gale
30
25
20
Price 35
Riyadh Pizza Market
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Sellers
0
5
10
15
20
25
30
35
40
Dominos Pizza Hut Dr Gale
30
25
20
Price 35
Riyadh Pizza Market
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Sellers
0
5
10
15
20
25
30
35
40
Dominos Pizza Hut Dr Gale
30
25
20
Price 35
Riyadh Pizza Market
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Sellers
0
5
10
15
20
25
30
35
40
Dominos Pizza Hut Dr Gale
30
25
20
Price 35
Riyadh Pizza Market
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Always Two Values in a trade
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Always Two Values in a trade
Difference between what I am willing to pay for and the price
Difference between what I am willing to sell for and the price
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How many firms does it take for competition?
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How many firms does it take for competition?
Only One
As long as they can enter the market