 Hello and welcome to the session in which we will discuss the concept of market equilibrium. In order to understand market equilibrium, we have to revisit the law of supply and demand briefly what we covered in the prior two sessions. The law of demand, what does that state? Well, if the price of something goes up, if the prices of something goes up, what's going to happen if the prices go up, we are going to demand less of it. The demanded quantity is less. So prices up, demand down. And if the prices of something that we want to buy is down, well, if the prices is down, the quantity demanded is up. Notice it's an inverse relationship between price and demand. In the prior session, we also looked at change in quantity demanded, which is the changes along this line due to prices. Then we discussed the change in demand where the line, where the demand curve line shifts to the right or shifts to the left. Then we discussed the law of supply, basically state if the price of something is down, if the price of our product that we are providing, if the prices are down, we have no incentive to supply, therefore the supplied quantity of the prices are down, the supplied quantity are down. If the prices are up, if somehow now suddenly there's more demand, if the prices are up for what we are providing, if the prices are up, we are willing to supply produce more of the quantity, more of the quantity. Simply put, this is a positive relationship between price and supply. Now also we discussed the change in quantity supplied, the change in quantity supplied, which is the change along the supply curve, change along the supply curve due to changes in prices. Then we discussed the change in supply where the supply line shifts to the right, which is supplying more or shift to the left. In this session in the market equilibrium, we are going to be combining both the supply and demand, supply and demand on the same graph. Let's go ahead and start our discussion. Before we proceed any further, I have a public announcement about my company, farhatlectures.com. Farhat Accounting Lectures is a supplemental educational tool that's going to help you with your CPA exam preparation as well as your accounting courses. My CPA material is aligned with your CPA review course such as Becker, Roger, Wiley, Gleam, Miles. My accounting courses are aligned with your accounting courses broken down by chapter and topics. My resources consist of lectures, multiple choice questions, true-false questions as well as exercises. Go ahead, start your free trial today. So what's market equilibrium? Market equilibrium is a state of balance or stability in a market where quantity demanded, what's demanded by the consumers, what we want, matches the quantity supply by the producers, by the sellers. So the forces of supply and demand intersect. Well, let me show you real quick on this graph what does that mean. Remember we are selling, we are selling pizzas. So someone is buying and someone is selling. So this is the price and this is the quantity and the supply line here and the demand curve is here and they intersect right at this point, right at this point. Let's see where do they intersect. They intersect at $3 per slice of pizza supplying 7,000 slices per semester. What does that mean? It means if the pizzerias on campus supply 7,000 slices of pizza and they sell them for $3, none of the supplies would be left. They will all be sold. Why? Because this is the equilibrium. 7,000 for $3 per slice, the consumers are willing to consume 7,000 slices. For more, if the charge is more, they're going to consume less. If the price is more and the producer produce 7,000, they're going to have what? They're going to have some leftover. They're going to have surplus. They're going to have surplus. If the price goes down to $2, what's going to happen is we're going to have a shortage and you only produce 7,000, we're going to have more demand because at $2 more people will buy. But at $3, we will clear sell everything. So on a competitive market, prices and quantities are determined through the interaction of buyers and sellers. We say this is the equilibrium for the supply and demand. Let's take a look at the graph once again and just make some few more comments before we dig into shifting the supply line right or left, shifting the demand line right or left. So at this point, at $3 and 7,000 slices, there's no excess demand. No one wants more pizzas. If it's $3, enough people to consume the 7,000 notice, quantity demanded 7,000, quantity supplied 7,000. This is the graph for this data. This is for the demand. This is the demand data and this is the supply data. So at this point, we are happy. 7,000 slices will make the producer happy because they can sell every single slice and the students, the consumers will buy every single slice and everyone is happy. There is no excess demand and no excess supply. The pizzerias don't have any slices to throw away and the students don't need any more. Buyers are willing to purchase the available quantity at the prevailing price and sellers are willing to sell the quantity at the demanded price. We will sell all the slices. If we are a producer and we're producing a total 7,000, every single slice will be sold, no, no, no shortage, no surplus. And you're going to see one keep emphasizing this word shortage and surplus. So the equilibrium price is also referred to as the clearing market clearing price. It means it's going to clear all the product based on this price. You will not have any product left because the price and the quantity are the perfect combination. In a sense, that's how much consumers wants to consume. This is how much the producer will produce and everything will be sold. No surplus, no shortage. Okay. Now, we have to understand the real world is more dynamic. People are organic. People are unpredictable. Sometimes what they want, they want to consume more of the pizza. Something want to consume less of the pizza. So this is the equilibrium in theory, but something will happen. Maybe somehow everybody wants to buy pizza. The demand curve will shift to the right, or suddenly nobody wants to buy pizza. The demand curve will shift to the left. Maybe some of the pizzerias, they find out, you know what, we're not making a lot of money. We're going to exit the pizzeria business on campus. We have less supply. Sometime you're going to have more businesses opening on campuses because everybody is buying pizza. You're going to have more supply. So the market is dynamic. So we have to understand, because of the market is dynamic, it will create shortage and surpluses at some point in time. So we have to understand what could create a shortage, what could create a surplus that moves this equilibrium line to shifting right, left, up, down. So market equilibrium is a dynamic concept, means it keeps changing. And due to various factors, what are the various factors? You could have a shift in consumer preference, where we like more pizzas or we don't like more pizzas. We can change in technology. We can produce more pizzas faster at a cheaper rate. Or now it's costing us more to produce the pizza. Input cost is going higher, like, for example, the sauce, the cheese, the dough, if they go up in prices. We could have shift in government policies. Government might want to tax pizzas. Why? Because it's not healthy. Or the government wants to encourage pizza, yes, to sell pizza, to give them some sort of a subsidies. And by the cheese, the government will subsidize 20% of it. So those and other factors will shift the supply curve and the demand curve up and down, right and left. However, in a well-functioning market, the forces of supply and demand will go back and will meet at equilibrium. So if this is shift up, the supply line will meet it, so on and so forth, and the other one shift down. So let's start by discussing what could create access supply or surplus. So when do we have a surplus? It's when we have more supply, more supply than what's demanded. One is increase in the production. Suddenly, if productions of anything ramp up without corresponding increase in demand, what could be a good example? Let's assume we have technological advancement in agriculture product leads to a higher Apple yields. Now we can produce more apples. So farmers increase their yield, increase their production significantly, but you don't have more demand. The demand is the same. Just the technology increase the supply. What's going to happen? You're going to have a surplus. Let me ask you this. If this happened, what do you think is going to happen to the price of apples? The price of apple will drop because the producers, they want to sell that access, that surplus. So the price will go down. They will have to lower their prices to get rid of the surplus. Decrease in demand. Suddenly, nobody wants to buy pizzas, nobody wants to buy apple. This happened due to change in consumer preference. Maybe there's an economic downturn. People are eating home. They're not buying pizzas or the availability of a cheaper substitute. So people don't want pizzas. They can buy burgers and it's cheaper for them. For example, if there's a sudden decrease in the popularity of a particular fashion trend, clothing manufacturers may find themselves with access inventory. So what happened? During the spring, there was certain fashion that's in demand. So all the manufacturer, they started to produce this. By the time they've done producing it, chipping it from China, mid-summer, late-summer, no one's interested in that fashion. They will have access inventory. Retailers will have access inventory. So that could happen. Decrease in demand. Also what could create surplus is something we called price floors. Now I put the price floors as a separate slide to kind of emphasize the importance of it because price floors are usually set by government. Price floors are usually set by government. What is a price floor? It's a price above the equilibrium level. So if you have equilibrium, if this is the equilibrium, the price, if this is, again, this is the price and this is the quantity. If this is the price now, if this is the original equilibrium, the government will set a floor, a price that's higher than the equilibrium. What would happen? This situation occur when there are government-imposed price floors. Or when suppliers overestimate the demand, where the suppliers cannot produce more. They think they're going to have a lot of demand, they overproduce and they have more. So a government floor will create a surplus. A government floor will create a surplus. How? Let's assume, let me just give you an example. The government sets a minimum price for wheat. Let's assume the market price is per bushel, it's $5, and the government says no. You cannot sell it for less than $7. Well, what's going to happen is this. Since it's more, since you can sell it for more than five, which is more than the market equilibrium, since it's imposed by the government, what's going to happen? The producers of wheat, they're going to produce as much as they can because the minimum they can sell it at seven or whatever they produce, they can sell it at seven minimum, but the price should be five. So what's going to happen? No one's going to buy it. People are going to try to find the black market or avoid buying it because it's more than what normal forces supply and demand will suggest. Therefore, under those circumstances, we'll have a surplus. So when the government intervene, they might create a surplus when they set a floor for a price. What could also create a surplus? Well, seasonal fluctuations. Some goods have seasonal demand. So if the supplier don't adjust their production and they keep producing all year long on the same rate, it will create a surplus. For example, during the holiday season, toy manufacturers may increase production to meet expected high demand. That's fine. However, or if the demand, let's assume they, you know, during the season, they think, you know, they're going to sell a lot. The demand's turned out to be lower than anticipated or they kept producing at the same level. They will have excess supply. What happened when you have excess supply? Come on, guys. You guys, old shoppers, you go to the stores. What happened after the holidays? If they cannot sell something, they put it on sale. Why? Because we have excess supply. They have to lower the price, lower the price. Another reason could be international trade factors. Change in international trade policies or shift in global supply chain can also lead to excess supplies. For example, if a country imposes tariff on imported goods, what does that mean? That means they don't want to, they don't want you, for example, in the U.S. They don't want us to buy a European product. Okay. Domestic producers, what they would do, they will increase production to meet the expected decrease in foreign competition because there's no competition. Well, what's going to happen is the domestic producers assume wine or cheese. They will start to produce more. Well, if the, if the production exceeds the demand, if the production does not meet the demand, if they, if they increase the supply much more, they will have access of supply. That's another reason where you can have access of supply. Let's take a look and see what the excess supply surplus would look like on a graph just to kind of to see what it looks like. This is the original equilibrium. If the price is $4, we are only willing to demand 4,000, 4,000 slices. However, the producers are willing to produce 10,000. Well, we're going to have a surplus of 6,000. What's going to happen because of the surplus? We're going to have to lower our prices for the slices of pizza or whatever we are selling to get rid of the surplus or the demand has to increase. Either demand has to increase or we have to lower our price to kind of get rid of this surplus. So if the market price is above the equilibrium price, we have a surplus. It created a surplus. So once again, market price above the equilibrium. This is the equilibrium and the market price is at 4. It created a surplus. Now, producers find in this situation, they will find difficult in selling their goods and services. So they may reduce the price to encourage more buyers, which eventually lead to a decrease in supply or an increase in demand. All they'll have to cut down on their production. Moving the market back toward the equilibrium. So what's going to happen to get rid of the surplus? The supplier will stop producing or lower their price and hopefully demand will pick up. Together, we go back to the equilibrium. So let's talk about shortage or excess demand. When would that happen? When we have more demand for something than we can supply of it. There's a shortage of something that's easy to understand. What could create a shortage? Well, an increase in consumer demand. Suddenly, there's a surge in consumer demand for a particular product. And there is not a corresponding increase in supply. Something somehow became fashionable out of nowhere. Or let's go back to COVID. During COVID, what happened to masks? We had a sudden increase. It's not a consumer demand, not under taste. But there was a sudden increase in consumer demand for masks. There was not enough masks. If you wanted to buy masks, assuming you can find them, you'd have to pay four, five, six times the price of a regular when you buy them without the COVID situation. This could happen also during changing consumer preferences. Marketing campaigns somehow, a company have a great marketing campaign or an industry like creating demand for eggs or milk, right? Or a positive shift in consumer income. Suddenly, people have more money because of that. They create access demand. And when you have an access demand, you have more than demand than supply. It's going to lead to a shortage. And what's going to happen when you have more demand than supply, prices will go up. Remember the masks. If you want to find a mask, you can find it. You're going to have to pay extra. For example, if a new smartphone is released with advanced features and a popular advertising campaign, we're talking about Apple here. It might generate higher demand than the manufacturers initially anticipated. And this happens to Apple every time they release a new phone where there's not enough, there's always access demand. There's a shortage. So you put your order and you have to wait a month or two to get your phone. That's what access demand is. It's a shortage. Another example will be supply disruption. And this we're here talking about COVID. An event that disrupts the supply of a product which can lead to access demand. Suddenly something happened, COVID, right? We cannot ship anything from China anymore. We cannot ship anything from the producer countries. We have a shortage. We have a supply problem. And especially during COVID, what happened during COVID, supply went down and demand for many product went up because people wanted to do what? They wanted to buy as much as possible so they can hoard it, right? They want to keep it. Demand went up, supply went down. Wow, that's a big problem. So prices go up. Supply disruptions can occur due to natural disasters, production issues, labor strikes, raw material shortages, or an event like COVID. You guessed it, like COVID. Okay, also what could create an access shortage or supply disruption is if a major oil producing country experienced political instability. And this is common when we have some unrest in the Middle East, okay? The oil supply are threatened, the oil supply route. And what happened is we have access demand. We want more, we want to store more oil. We don't have it. We have a shortage. Prices of oil goes up. Another example from COVID is hand sanitizer shortage. One man from Tennessee, Matt Coven, who was an Amazon seller where he did his stock piles, 18, almost 18,000 bottles of hand sanitizers. And he was selling them at a premium. So what happened is that the Tennessee intervene because they have rules against price gouging and they forced him to kind of lower their price. What he did, he eventually donated them to his church. But the point is this is an example of where you have a shortage because of some event occurring. You have more than demand. So the demand for hand sanitizers went up, the demand went up, the supply stayed the same. It was the same. Now eventually the supply catch up with the demand. But at that point early on during COVID, we had more demand than supply. And I'm sure if you remember those days, you'll find hard time finding hand sanitizers. Another reason for access demand is price ceiling. Again, I have price ceiling on a separate recording to kind of let you know that price ceiling usually occur when you have a government intervention. Price below the equilibrium. So here what the government is doing, if this is equilibrium, the government is setting the price below equilibrium. So this is price. This is quantity. This is P1. They will set the price at P2. When you have price at P2, you're gonna create access demand. If the market price is set below the equilibrium, it would result in access demand. The situation often occurred where a government imposed price ceiling or when suppliers also underestimate the demand. They don't, and they don't, and they don't, they underestimate the demand for their product. So an example with this government price ceiling is when the government sets a maximum price for rental housing below equilibrium. So for example, let's assume in New York City, the fair market value of rental property in Manhattan, which is for the sake of illustration, is $5,000. But if the government sets a price below, let's assume the government sets a price at, you know, $3,000. There's, you know, price ceiling. You cannot charge more than $3,000 and there's more demand because you cannot find enough apartments because if you're living in a $3,000 apartment, you are not going to move because the fair market value is five. What could that lead to is what's called the black market and people with this low rental, they will sublease it to someone else, maybe at $3,500. They'll pay $3,000, the new tenant paid them $3,500 and they will pocket the $500. You will create what's called the black market. But why did that happen because the government set a price ceiling? Why? Because the price is below the market. Everybody wants those units and everybody wants them. There's not enough because the government sets a price ceiling. It could eat and access demand, okay? Now, if you're lucky to have the apartment, the $3,000, you're gonna be happy, say, great. Price ceiling is the best thing that ever happened. But if you want to rent in Manhattan and you cannot find, well, you'd say it's the price ceiling because I want it, but I can afford to pay $5,000, but there's not enough because the price ceiling, people with lower capacity to pay for it is able to. It's basically against supply and demand. It's forcing the market to create access demand because the government is lowering the prices. Again, there's more demand than supply, more demand than supply, but this is like basically the government is forcing that by creating lower prices for something, they should let it go, okay? So you would sublease your unit. What could also create access demand? Again, I'm going over these examples to kind of help you understand in a multiple choice, how you would answer multiple choice if this is creating an access demand or an access supply, shortage or surplus. Seasonal fluctuation, the same concept. Some goods experience seasonal variation in demand and if suppliers do not adjust their production, it could result in access demand so they don't produce enough. During the holiday season, the demand for certain toys or electronics may exceed what's available on supply. So if the suppliers did not increase their supply, it would lead to shortages and access demand. Also anticipated prices changes. If consumer expect the price of a product to increase in the future, guess what they do? They will go ahead, buy and hoard. Let's assume the government says we are going to impose $2 tax on cigarettes or on alcohol. Well, if you drink alcohol or if you consume cigarettes, what's gonna happen, they may say in the next three months we're gonna do so. You're gonna go ahead and buy as much as possible now. Why? Because you want to get there before the additional taxes are added to your product. You will create access demand, not enough supply. So consumer would rush to purchase the product at the current prices leading to shortage. This happens also with goods like electronic devices or vehicles when consumer anticipate price hikes or changes in government regulation. So same concept with talking about government regulation about electric vehicles. Like if you wanted to buy a Tesla, there was a tax credit of 7,500 and that tax credit, if you buy an electronic vehicle, you can get a tax credit from the government 4,700. So every year the government was renewing this tax credit. So every year, the people by the end of the year before the government makes a decision to whether to renew it or not, would rush in to buy their car so they can get the 7,500. In the following year, the government would renew it. But this happened for several years. So you would see before the regulation changes, everyone rushes to get that extra credit for the from the government. And this is what the excess demand or shortage would look like on a supply and demand curve. So here what's gonna happen, once again, we're setting a market price below. We're setting a price. This is the original equilibrium. E1, we're setting a price. There was a three below the market because we're setting a price below the market. It's gonna create a shortage. It's gonna create a shortage. Why? Because the demand at $2 is almost 11,000. Well, what's happening is this, the demand at $2, we can only have four. Therefore, it's creating a surplus. 11 minus four is 7,000 slices of pizza for talking about pizzas. Create this. This is the shortage that it will create. So if the market price is below the equilibrium, market price is two, which is said by the government is below the equilibrium. It can create a situation with access demand or what we know as shortage. Consumer demands more of what producers are willing to supply at that price because at $2, they're not gonna give you 11,000. Okay, they don't, they don't. They're only willing to supply 4,000. And the demand, the true demand is 11,000 at that price but they're not going to create a shortage. And what happened is consumer demand more than what the producers are willing to supply at that price leading the competition among buyers. And eventually what's gonna happen, if you let it go, if the government don't intervene, the prices will start to go up and will go back to equilibrium. We'll go back to equilibrium. As price increases, suppliers are incentivized to increase production. So as the prices goes up, suppliers are willing to increase more. As the prices goes up, they're willing to increase more. And if they find it at $3, 7,000 is the, that perfect equilibrium that they will stop and people will buy at $3, the whole $7,000 unit that's available. Now, it's very important, it's very important to know how to read graphs or how to use graphs in order to understand the questions and able to answer the questions. So I'm gonna show you a few things about what would happen to shift in supply and demand. So I showed you what could shift supply and demand. What are the reasons could create an access demand or an access supply. Now I'm gonna show you four different graphs of how to do this, how to be able to insert multiple choice questions. So on the Y axis, we always have the price. On the X axis, we have the quantity. Here's what's gonna happen. In this example, we're gonna keep supply constant. And we're gonna say the original demand is here. So the original equilibrium, we're gonna call it, we're gonna call this, this is line D1. So this is equilibrium one. So this is price one, P1 at quantity one, at Q, oops, at Q1. And what we're gonna do is this. We're gonna increase the demand and see what happens and how to read this. So if they told you somehow the demand for a product increase, nothing happened, we're keeping supply constant. So this is the demand curve. I'm gonna put the new curve, the new D2 in a different color. So notice we shift the demand curve D2. Now here's what happened in D2. In D2, this is the equilibrium point two. The price is P2. What happened when you have more of the demand? The price will go up. Okay? Now also, we have Q, Q2. Now we don't know exactly how much Q will increase, but we know if we increase demand, the price will go up. So simply put, demand is up, price will go up. If we have more demand for something, what's gonna happen? The producer will increase their prices because they know there's more demand for that. Let's look at the second scenario. Again, what we're gonna do, we're gonna have, let me use bread pin. Let's keep it the same, it doesn't matter. Now we're gonna also keep supply the same. Supply then, and we have supply. Just go back here. Supply demand. So this is the supply curve and this is D1. We're gonna keep the supply is the same. So here we have the original equilibrium point, E1, Q1, P1. What's gonna happen now, rather than increasing demand, we're gonna be reducing demand. Now let me change colors here and we're gonna shift the line to the left. So this is D2. So let's see what happened at D2. It crosses the supply line here at D2. If demand goes down, price goes down. If demand goes down, price goes down. Also the quantity is gonna go down as well. Quantity will go down as well. Quantity, what I mean by quantity, quantity supplies because the suppliers will be willing to supply less. But quantity, if the demand less, the price will be less, the price will be less. Now let's do the, let's work with rather than changing the demand, let's change the supply. So now we're gonna go ahead, say this is the supply, this is the demand. Now we're gonna keep the demand constant. So this is S1. So this is the price and this is the quantity. Oops, let's go back in. Let's go back and do this. This is the supply line. This is the demand. We're gonna keep demand constant. We're gonna have this is S1, price, quantity. This is the original equilibrium. Now we're gonna change the supply. We're gonna supply less. We're going to supply less. Well, we're gonna supply less. So if that's the case, oh, let's supply more first. We're gonna supply more. So we're gonna shift to the right. We're gonna supply more. This is S2. At S2, we hit the demand curve here. What happened to the price? So this is, now let's work with the supply curve. Let's assume we have the original is, we have a demand line D and S1. So we're gonna keep demand the same and we're gonna change the supply. So this is the original E1, equilibrium one. This is P1. This is quantity one. Now we're gonna increase the supply curve. We're gonna increase the supply. We're gonna shift the supply curve to the left S2. Now this is E2, E2. What happened as we supply more? There's more of something. The price of that something goes down. Now if we supply more, obviously the quantity will go, we're supplying more, the quantity will go up but we don't know by how much. But we know of the supply. When supply increases, the initial impression is prices will go down. And let's work the same scenario keeping the demand the same. Now we're gonna have D is the same. We're gonna have S1. So we're gonna have the original equilibrium. This is P1, this is Q1 and this is E1. And now we're gonna shift the supply curve to the left. We're gonna shift the supply curve to the left. This is S2. Well, so this is the new equilibrium. We're supplying less, we're supplying less. If we supply less, notice what's gonna happen. The price will go up. The quantity obviously will go down because I'm telling you we're supplying less. How's that gonna affect the price? P2. So why am I showing you this? Because when you want to answer multiple choice questions, please don't try to guess. Just sit down and say, if that happened, if this is what they're telling me happened, start with the original graph and say, is the man shifting to the right? Is the man shifting to the left, right? Is supply shifting to the right? Is supply shifting to the left? So don't try to guess anything. Try to use the graph, okay? Let me show you here one more time. Same information can basically summarize it. If supply increases, well, without even telling you anything, what would happen if supply increases? If you have more of something, if you have more of something, generally speaking, everything else is equal. The price of that something should go down. And let's assume supply is increasing, the end of demand is decreasing. It's both at the same time. So supply is going up, okay? Somehow producers are producing and they're not aware that people don't want their product. Then this happens all the time. People misjudge they produce something people don't want. What's gonna happen to the equilibrium price? You guessed it, it's gonna go down. What's gonna happen to the quantity of the equilibrium? We really don't know. It all depends on the direction and the magnitude of that direction. How big that changes? So you don't know how much the quantity will change. You know, it's gonna go up because it's telling you, change of supply is up, we don't know. But for sure the price will decrease. Let's assume the supply goes down. We have less supply of something. What happened when we have less supply? Less supply, generally speaking. Less supply, well, we have a shortage. The price should pick up. It's not only that, we have more increase. Think about COVID. Think about masks, hand sanitizers. We don't have enough of them at the beginning and the supply went throughout the roof. What happened to the prices? The prices increase. How much the quantity will go down by? We really don't know depending on the magnitude and the direction. Supply went up and demand went up. Supply went up, demand went up. What happened to the price? I really don't know. It's unknown because I don't know the magnitude. That supply went up more than demand or demand more went up the supply? I don't know. And usually on the exam, they don't expect you to know. If you have a question like this, one of the answers will be undetermined and the answer choice is undetermined. I don't know what's gonna happen to the price. To the quantity, of course it's gonna increase. I'm telling you, the change in supply is up. Therefore it will increase. Let's take a look at the last scenario. Change in supply goes down. We have less of something. What should usually happen? Price should go up. Well, yeah, but we have less demand. How about this? We have less of something, less of its demand. What's gonna happen to the price? I really don't know because I need to know was the change in supply greater than the change in demand? So the price, I don't know. What about the quantity? It's like basically given to you. If you're telling me supply is down, therefore my quantity equilibrium will go down. I'm gonna have less. Of course I'm gonna have less. I'm telling you the change in supply is a decrease. What should you do now? As a CPA candidate, go to far hat lectures, work MCQs, multiple choice questions. That's gonna help you on your Econ CPA exam section. This is, I mean supply and demand, econ in general, those are easy points on the exam. If you understand them and this is my objective is to help you understand the concept so you will be ready for the exam day. Good luck, study hard, stay safe.