04 Supply and Demand Part 2

04 Supply and Demand Part 2 - Demand & Supply: A Closer...

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2/17/11 11:57 PM Supply Curve Shifters Generally the supply curve shows how price affects quantity supplied, other things equal; the law of supply applies There are “other things” that are things, other than price, that affect supply o Fluctuations in technology, economy o Allow the world to run as normal Change in these “other things” cause the entire S curve to shift When price changes, we only move up and down the curve, but these other factors shifts entire curve Number of Sellers o An increase in the number of sellers increases the quantity supplied at each price, shifts S curve to the right; decreases causes shift to the left i.e. “Cotton Shortage-Pricey T-shirts & Jeans”- article on Blackboard cotton prices double on world cotton market global producers choking off supply drought in China domestic shortages in India floods in Pakistan S curve shift to the left American cotton producers are very happy
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demand curve is shifting: increase in number of buyers- new curve is D1
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04 Supply and Demand Part 2 - Demand & Supply: A Closer...

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