Basics: Market

This lecture covers the basics of market equilibrium, including the interaction of supply and demand, price adjustments, and the effects of administered prices. It also discusses perturbations of market equilibrium, modifications of equilibrium due to changes in demand and supply, and the concept of social welfare in markets. The instructor explains how social welfare is maximized when the marginal willingness to pay equals the marginal willingness to accept, and how market equilibrium can align with social welfare under certain conditions. The lecture concludes by highlighting the importance of the market model in answering various societal questions and economic phenomena.