Changes in Equilibrium

Changes in Equilibrium - TheMarketForcesofSupplyandDemand...

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The Market Forces of Supply and Demand Three Steps to Analyzing Changes in Equilibrium 1) decide whether the event shifts the supply curve, the demand curve, or sometimes both 2) Decide whether the curve shifts to the right or to the left 3) we us the supply-and-demand diagram to compare the initial and the new equilibrium example: summer weather hot, how does it affect the ice cream 1)hot weather changes ppl’s taste for ice cream weather changes the amount people want to buy at any given price supply curve unchanged bc doesn’t directly affect the firms that sell ice cream 2)Bc people want to eat more ice cream during hot weather demand curve shifts to the right shift shows the quantity of ice cream demanded is higher at every price 3) increase in demand raises the equilibrium price hot weather increases the price of ice cream and the quantity of ice cream sold Shifts in Curves versus Movements along Curves When hot weather increases demand for ice cream and drives the price up. the quantity of ice
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Changes in Equilibrium - TheMarketForcesofSupplyandDemand...

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