 Hello. Today we are going to talk about supply and demand which you have already heard about or learned about in the introductory microeconomics class or even in macroeconomics class. The required reading for today is to read the pages from 25 to 30. We'll first talk about what supply and demand is. The differences between the quantity demanded, quantity supplied and demand and supply. And also talk about law of demand and law of supply and how the market works using the ideas of supply and demand. How the price functions and how to determine the market equilibrium, market equilibrium price and market equilibrium quantity. So the demand is, the definition of the demand is the relationship between the price of product and the quantity that buyers want to buy. So using price and quantity, there is a law of demand and there is a supply of demand. So law of demand is when price goes up. So to describe demand and supply there are many ways to describe. And first is a table. We're going to see the table and we're going to see the graphs and we're going to see the specific functions. You probably need to, so table example. Here when you look at the demand side, which is on the left hand, when the price goes down, the quantity demanded goes up. Again, the demand is different from the quantity demanded. So when there is a supply and demand, we call there is a market equilibrium is where the... Let's first look at the example from the table. So to find the market equilibrium first thing you need to do is to find the price where quantity supplied is equal to the quantity demanded. So at price, we can also look at this graph. Okay, here is mathematical functions. What are we looking for? Market equilibrium price and market equilibrium quantity. So first thing to do is to find the market quantities are equal to each other. Quantity supplied and quantity demanded. So quantity demanded is here the function is 1000 minus 20 times p. And quantity supplied is 20 times p. So if we make it equal to each other, then here we are. Here we have 1000 minus 20. Okay, here is another example. This is a shortage case. So demand and supply functions are the same as before. And let's assume that the price is 15. And if you go back to the table slide, then you can see the quantity supplied and quantity demanded. You can read the quantity supplied and quantity demanded. So on the graph, we can see, we can show this $15 as a price. There is a quantity supplied, which is a 300, quantity demanded, 700. The difference between the two is a shortage, which is a 400. Okay, let's look at the surplus case. Again, suppose the demand and supply curve functions are as follows. Okay, let's suppose, let's assume that the price for the previous is a 35k. And if the price is a 35k, quantity demanded is a 300, quantity supplied is 700. On the graph, we can show that the price is equal to 35. Then there is quantity demanded, which is 300, quantity supplied, which is 700. There is a surplus, 400. On the graph, we can show that the demand curve is downward sloping, linear curve, linear line, actually. On the supply side, supply curve is upward sloping, linear. And again, on the graph, y-axis is always, the price is on the y-axis, and quantity demanded and quantity supplied are on the x-axis. Okay, here there is mathematics functions. So let's look at the demand. So, specific functions which can be given as follows. Quantity demanded is equal to 1000 minus 20 times p, and price is equal to 50 minus 0.05 times quantity demanded. Well, that's a general, oh, that's a specific function.