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Supply and Demand shifting

Supply and Demand shifting - Shifts upward(supply decreases...

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Supply and Demand shifting Law of demand : if all other factors remain equal, the higher the price of a good, the less quantity demanded of that good (downward sloping) Law of supply : if all other factors remain equal, the higher the price of a good, the higher quantity supplied of that good (upward sloping) Curve shifts Demand Supply What happens? Shifts upward (demand increases) Stays the same Price increases, quantity decreases Shifts downward (demand decreases) Stays the same Price decreases, quantity decreases Stays the same
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Unformatted text preview: Shifts upward (supply decreases) Price increases, quantity increases Stays the same Shifts downward Supply increases) Price decreases, quantity decreases Equilibrium vs. Disequilibrium Equilibrium: quantity supplied = quantity demanded the intersection of the supply and demand curve Disequilibrium: Price change Quantity Demanded Quantity Supplied What happens? Price is below equilibrium Increases Decreases Shortage Price is above equilibrium Decreases Increases Surplus...
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