Supply & Demand Shifts

Part 3: Topic Completion

Shifts in Demand (TIPSE)

Shifts in Supply (TIN)

S & D Shifts

Price

Qty

D1

S1

-------------------

-------------

P1

Q1

E1

S2

--------------

--------

P2

Q2

E2

Market for Soda

TIPSE TIN

Determinants of Demand Determinants of Supply

Tastes, income, populationPrice substitutes/complements, expectations

Technology, input pricesnumber-sellers

Change in Demand (NEW Demand Curve) Change in Supply

(NEW Supply Curve)

Price

Qty

Large SUV’s

D1

S1

----------

-------------

$40,000

40K

E1

D2

--------------

----------

P2

Q2

E2

TIPSE ↓Complement Price ↑

↓ Demand ↓ (shifts left)

Economic Event: Price of gasoline ↑ $2.5 to $5.0 per gallon

End Result:

1) Decrease in Demand (also called decrease in demand)

& 2) Decrease in Quantity Supplied (move along supply curve)

Practice Test

Price

Qty

D1

S1

-------------

P1

Q1

E1

D2

--------------

D1

S1

$1000

E1.

Shortage of Supply

Price Ceiling$900

Market for T-Shirts

Q1

Government Price Controls

----------------

---------------

QS QD

End Result:Quantity Demanded RisesQuantity Supplied FallsShortage of Supply

Automation & Jobshttp://www.cbsnews.com/video/watch/?id=50138922n

Echo Boomers

They make up nearly one-third of the U.S. population & spend $170 billion a year of their/ parents' money…. 

“Helicopter Parents”