Three questions to ask about Demand & Supply Shifters?

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Presentation transcript:

Three questions to ask about Demand & Supply Shifters? What are they Meder?

The three questions are? Does the event (headline ) affect Demand, Supply, or Both? Does the event (headline ) shift the graph to the right (increase) or Left (decrease)? What are the new equilibrium price and quantity? (P2 & Q2) Plus How will the market react to correct the disequilibrium?

Is the new equilibrium Above the old one and did Q2 increase? A shortage will occur, you’ll have to wait in line to be Satisfied. Prices will be pushed up too 

If the New Equilibrium is above the old but Q2 is smaller than Q1is? There will be a surplus and too much will be available in the market. Prices will be pushed down and items will go on sale to reduce inventory 

What if Demand and Supply both shift See Page 107