Lecture 10

Lecture 10 - Equilibrium quantity changes in the same...

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February 4, 2009 When demand changes: Supply curve does NOT shift But there is a change in the quantity supplied Equilibrium price & equilibrium quantity change in the same direction as the change in demand Effects of Changes in Supply Event: Europeans produce bottled water in the USA o Supply changes o The curve goes rightward since there’s an increase o When supply changes: Demand curve does NOT shift But there is a change in the quantity demanded Equilibrium price changes in the opposite direction as the change in supply
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Unformatted text preview: Equilibrium quantity changes in the same direction Changes in BOTH demand and supply: When two events occur at the same time, work out how each event influences the market o Does it change demand or supply? o Does it increase or decrease demand or supply? o What are the new equilibrium price & quantity and how have they changed? An increase in demand shifts the demand curve & supply curve rightward. The equilibrium quantity increases but the eq. price may rise OR fall....
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This note was uploaded on 09/29/2009 for the course ECON 101 taught by Professor Balaban during the Spring '07 term at UNC.

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