Unit 2: Supply & Demand
Together!!!
2
PricePrice
QuantityQuantity
PricePrice
QuantityQuantity
Market Equilibrium = Q.D. = Q.S.Market Equilibrium = Q.D. = Q.S.
PricePrice
QuantityQuantity
SS
DD
SS
DD
2323
1515
PricePrice
QuantityQuantity
PricePrice
QuantityQuantity
ShortageShortage SurplusSurplusDemand >
SupplySupply > Demand
SS
DD
SS
DD
PricePrice
QuantityQuantity
PricePrice
QuantityQuantity
EffectiveEffective Non-EffectiveNon-Effective
Price CeilingPrice CeilingCan not Sell Above It
P.C.P.C.
P.C.P.C.
Non-EffectiveNon-Effective EffectiveEffective
Price FloorPrice FloorCan not Sell Below It
PricePrice
QuantityQuantity
PricePrice
QuantityQuantity
P.F.P.F.
P.F.P.F.
Situations
Price
Quantity
S
D
Chocolate Milk is proven to cure cancer; however, half of the population of cows die from mad cow disease. How does this information affect the price and quantity of chocolate milk?
Pho is proven to increase the rates of heart attacks, and three new Pho restaurants open in the area. How would this information affect the price and quantity of Pho?
Price
Quantity
S
D
Price
Quantity
S
D
The price of chips increases, and 3 factories that produce salsa blew up at the same time. How would this information affect the price and quantity of salsa?
Chicken farms invented faster method to raise chickens; more than half million Chinese immigrate to the city.How does this information affect the price and quantity of orange chicken?
Price
Quantity
S
D
Use a S&D to explain this double shift
13