Shifts in Supply and Demand

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Presentation transcript:

Shifts in Supply and Demand Scenarios from Fever 1793.

Determinants of Demand Consumer tastes/preferences Consumer income/wealth Prices of related goods Consumer expectations of the future The number of buyers

Determinants of Supply Productivity/Technology Prices of resources used Government policies Producer expectations about the future The number of sellers

Market: Coffee Philadelphia doctors decide that coffee prevents people from contracting yellow fever.

Price Quantity Market: Coffee D1 S1 P1 Q1 P2 D2 Q2

Market: Coffee Two new coffee houses open on the same street as Mattie’s coffee house.

Price Quantity Market: Coffee D1 S1 P1 Q1 S2 P2 Q2

Market: Coffee Cook Coffeehouse announces that it will cut coffee prices in half starting next week.

Price Quantity Market: Coffee D1 S1 P1 Q1 P2 D2 Q2

Market: Vegetables Yellow fever breaks out in Philadelphia. Farmers refuse to bring produce to market for fear of contracting the disease.

Price Quantity Market: Vegetables D1 S1 P1 Q1 S2 P2 Q2

Determinants of Demand Determinants of Supply Consumer tastes/ preferences Consumer income/wealth Prices of related goods Consumer expectations of the future The number of buyers Productivity/Technology Prices of resources used Government policies Producer expectations about the future The number of sellers