Download Changes in Market Equilibrium

Economics
Changes in Market Equilibrium
E. Napp
1) Several factors can create disequilibrium in a market.
Define disequilibrium:
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How can price push a market into disequilibrium?
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Why does a shift in the demand or supply curve push a market into
disequilibrium?
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Can new technology push a market into disequilibrium?
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Provide an example of new technology pushing a market into disequilibrium:
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2) What is another word for excess supply?
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What occurs when this happens?
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What course of action do producers take to remedy this problem?
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Why does this course of action work?
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3) What is another word for excess demand?
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What occurs when this happens?
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What course of action do producers take to remedy this problem?
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Why does this course of action work?
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4) Explain how the equilibrium price and quantity sold of eggs will change in
the following cases:
A- An outbreak of food poisoning is traced to eggs:
Quantity of eggs sold: ___________________________________
Equilibrium price: ______________________________________
Producers’ remedy: _____________________________________
B- Scientists breed a new chicken that lays twice as many eggs each week:
Quantity of eggs sold: ____________________________________
Equilibrium price: _______________________________________
Producers’ remedy: ______________________________________
C- A popular talk show host convinces her viewers to eat an egg a day:
Quantity of eggs sold: ___________________________________
Equilibrium price: ______________________________________
Producers’ remedy: _____________________________________
5) Search costs are the financial and opportunity costs consumers pay when
searching for a good or service.
An example of a search cost might be driving to different stores and calling
different towns to find an available doll.
How do search costs affect consumers’ decisions to buy?
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6) So, is price the only factor in a consumer’s decision to buy? Explain your
answer.
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