1. Simultaneous or Double Shift Practice

2. Simultaneous Changes in Demand and Supply
Example:
1. Assume that the cost of steel for bicycles has
gone down.
2. Assume that bike riding has become a very
popular form of exercise.
Which curves have shifted and why?

3. - Supply increased due to lower input costs (cost of steel went down).
Answer
- Supply increased due to lower input costs (cost of steel went down).
- Demand increased because bike riding
became more popular.
How would this look on a graph?

4. Bicycles P S S1 p p1 D1 D Q q q1 q2
S  & D  .: P ? & Q ↑

5. Same situation, new look
- Supply increased due to lower input costs (cost of steel went down).
- Demand increased because bike riding
became more popular.
How would this look on the next graph?

6. Assume that
You start at
Point 1. With a
Simultaneous increase in both
Demand &
Supply, at which number would
you finish after the shifts.

7. You would end up at point 5 as shown
to the right.
This is
the increase
In Demand
This is the
Increase in
Supply.

8. Simultaneous Changes in Demand and Supply
Example:
Assume that there has been a terrible hurricane in Florida which devastates the orange crop.
Assume that people suddenly discover that eating
oranges gives you really bad breath.
Which curves have shifted and why?

9. Supply decreased due to a natural disaster.
Answer
Supply decreased due to a natural
disaster.
Demand decreased because most people
dislike having bad breath.
How would this look on a graph?

10. Oranges S1 P S p1 p D D1 Q q2 q1 q
S  & D  .: P ? & Q↓

11. Assume that you start at
Point 1. With a
Simultaneous decrease in both Demand & Supply, at which number would
you finish after the shifts.

12. You would end up at point 2 as shown to the right.
This is
the decrease
In Supply
This is the
decrease in
Demand.

13. Simultaneous Changes in Demand and Supply
Example:
Assume that there has been new technology developed
that increases wheat production substantially.
Assume that people more people suffer from wheat gluten allergies.
Which curves have shifted and why?

14. Supply increased due to technology making
Answer
Supply increased due to technology making
it more productive (more can be made in the
same time).
Demand decreased because fewer people
bought wheat due to gluten allergies.
How would this look on a graph?

15. Wheat P S S1 p p1 p2 D D1 Q q q1
S  & D  .: P↓ & Q?

16. Same situation, new look
Supply increased due to technology making
it more productive (more can be made in the
same time).
Demand decreased because fewer people
bought wheat due to gluten allergies.
How would this look on the next graph?

17. Assume that you start at
Point 1. With a
Simultaneous increase in Supply and decrease in Demand, at which number would you finish after the shifts.

18. You would end up at point 6 as shown to the right.
This is
the increase
In Supply
This is the
decrease in
Demand.

19. Simultaneous Changes in Demand and Supply
Example:
Assume that four computer manufacturers go bankrupt and cease production.
Assume that computers become very popular.
Which curves have shifted and why?

20. Supply decreased due to less competition
Answer
Supply decreased due to less competition
Demand increased because computers are
popular.
How would this look on a graph?

21. Computers P S1 S p2 p1 p D1 D Q q1 q
S  & D  .: P↑ & Q ?

22. Same situation, new look
Supply decreased due to less competition
or suppliers.
Demand increased because computers are
more popular.
How would this look on the next graph?

23. Assume that you start at
Point 1. With a
Simultaneous decrease in Supply and increase in Demand, at which number would you finish after the shifts.

24. You would end up at point 4 as shown to the right.
This is
the decrease
In Supply
This is the
increase in
Demand.