 When curves move for any reason, the equilibrium point will end up in a new location

 If there is a shortage of steel, the auto industry will have to alter its production

 If the auto industry chooses to cut production according to availability of steel, the amount of cars produced will go down

 Supply of cars decrease because of a severe steel shortage and the material has become more scarce

 The company will have to produce less cars to maintain the same price  Quantity will move  Equilibrium will show a higher price and lower quantity

 Consumers will have to pay more for cars if they want them  Whenever the supply and demand curves move- a new equilibrium is created (important to remember)

 A decrease in the supply will create a higher price with this

 Supply and demand for CDs- if the band becomes more popular, demand will increase substantially  Quantity increased as well as price

 Determinant of consumer taste and preferences will cause movement in a demand curve  Music stores are constantly trying to figure out how the likes and dislikes of teens will impact the demand for music

 CDs that were once popular may now be priced too high, leaving the store with a surplus  They will need to drop their prices (have a sale) to move the remainder of their merchandise

 If the government decides to subsidize a certain carmaker’s efforts to produce cars, the cost of production for the company will decrease, thus making it easier for the company to make cars

 Maybe the government wants Ford to produce electric cars  Because new technology is very costly, the extra money will help defray the expense  Will allow the company to produce more cars at a cheaper price

 What happens if a product suddenly falls out of favor with the public?  For instance, baggy pants like those worn by rapper MC Hammer sold like hotcakes a number of years ago

 As his popularity waned, the demand for the pants went down drastically  No matter what the supply was, the demand was zero

 They are models of reality  They graph what is common sense  Always make sure you label them correctly  They are rarely neat straight lines