Markets: Exo

This lecture covers the concepts of market equilibrium, demand, and supply in a competitive market. The instructor explains the reasons behind the negative slope of the demand curve and the positive slope of the supply curve. Through examples, the lecture explores how price limits imposed by the government affect market outcomes and equilibrium. Additionally, the lecture delves into the impact of subsidies on different types of buyers in the market, discussing the potential for crowding out and windfall gains. The instructor also addresses the challenges of discriminating between buyers who truly need subsidies and those who do not, highlighting the complexities of promoting certain behaviors through economic incentives.