{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

50 200 2resulting 2resulting in a lower price price 4

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: urve is called a “change in the quantity demanded”. Example: A Change in Supply Example: 1. 2. 3. The change in the price of sugar, an input into making ice cream, affects the supply curve. The supply curve shifts to the left. The supply decreases from S1 to S2. The shift in supply curve raises the equilibrium rice from $2 to $2.5 and lowers the equilibrium quantity from 7 to 4 cones. That is, the price of ice cream rises, and the quantity of ice cream sold falls. How a Decrease in Supply Affects the Equilibrium How Price of Price Ice-Cream Cone Cone 1.An increase in the 1.An price of sugar reduces the supply of ice cream… of New New equilibrium equilibrium $2.50 2.00 2….resulting 2….resulting in a lower price… price… 4 FIGURE 10 7 3….and a lower quantity sold. quantity S2 S1 •An event that reduces An quantity supplied at any given price shifts the supply curve to the left. The equilibrium price rises, and the equilibrium quantity falls. •Here, an increase in Here, the price of...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern