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Unformatted text preview: 9-21Demand current increase (Demand to right) Increases prices. - for a time, expectations can be self -fulfilling.Stock market Increased 1998-99 ended March 2000housing increased higher 2002-06Bubble bursts : Prices go down. Demand to left and decreases.made worse when sales on pricing market were with borrowed money.Demand increases - Price and Quantity both increaseDemand decreases - Price and Quantity both decreaseIf Demand shifts, equilibrium Price and equilibrium Quantity move in the same direction.Supply Shiftsprices of inputstechnology of productionnumber of firmsSupply shifts to left, Supply decreases.Supply decreases (left) : Price increases and Quantity decreases Opposite directions.Supply increases (right) : Price decreases and Quantity IncreasesMarket for gas : Supply to left. Price of oil goes up : Refinery fire. Pipeline rupture.Supply to right. Price goes down : Refinery fixed. Pipeline fixed....
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- Spring '07