Unit 2: Supply & Demand

Together!!!

2

PricePrice

QuantityQuantity

PricePrice

QuantityQuantity

Market Equilibrium = Q.D. = Q.S.Market Equilibrium = Q.D. = Q.S.

PricePrice

QuantityQuantity

SS

DD

SS

DD

2323

1515

PricePrice

QuantityQuantity

PricePrice

QuantityQuantity

ShortageShortage SurplusSurplusDemand >

SupplySupply > Demand

SS

DD

SS

DD

PricePrice

QuantityQuantity

PricePrice

QuantityQuantity

EffectiveEffective Non-EffectiveNon-Effective

Price CeilingPrice CeilingCan not Sell Above It

P.C.P.C.

P.C.P.C.

Non-EffectiveNon-Effective EffectiveEffective

Price FloorPrice FloorCan not Sell Below It

PricePrice

QuantityQuantity

PricePrice

QuantityQuantity

P.F.P.F.

P.F.P.F.

Situations

Price

Quantity

S

D

Chocolate Milk is proven to cure cancer; however, half of the population of cows die from mad cow disease. How does this information affect the price and quantity of chocolate milk?

Pho is proven to increase the rates of heart attacks, and three new Pho restaurants open in the area. How would this information affect the price and quantity of Pho?

Price

Quantity

S

D

Price

Quantity

S

D

The price of chips increases, and 3 factories that produce salsa blew up at the same time. How would this information affect the price and quantity of salsa?

Chicken farms invented faster method to raise chickens; more than half million Chinese immigrate to the city.How does this information affect the price and quantity of orange chicken?

Price

Quantity

S

D

Use a S&D to explain this double shift

13