Markets in Action OBJECTIVE Demonstrate changes in market equilibrium.

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Presentation transcript:

Markets in Action OBJECTIVE Demonstrate changes in market equilibrium

2 1, D1D1 Increase in Demand D2D2 Shortage 900 S E1E1 E2E2 Quantity of Caribbean Cruises (thousands per year) Price per Cruise (dollars) 0

D2D2 S D1D1 Surplus 20 Decrease in Demand E1E1 E2E2 Quantity of Gas Guzzlers (thousands per month) Price per Gas Guzzler (thousands of dollars) 0

D Surplus S1S1 Increase in Supply S2S2 E1E1 E2E Quantity of Babysitters (thousands per month) Price per Hour (dollars)

D Shortage 600 S1S1 S2S2 400 Decrease in Supply E2E2 E1E1 0 Quantity of Lumber (billions of board feet per year) Price per 1,000 board feet (dollars)

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