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Download Module Supply and Demand: Changes in Equilibrium
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Module 7 Supply and Demand: Changes in Equilibrium KRUGMAN'S MACROECONOMICS for AP* Margaret Ray and David Anderson What you will learn in this Module: • How equilibrium price and quantity are affected when there is a change in either supply or demand • How equilibrium price and quantity are affected when there is a simultaneous change in both supply and demand What Happens When the Demand Curve Shifts? • When demand increases, the equilibrium price and quantity both increase What Happens When the Demand Curve Shifts? • When demand decreases, the equilibrium price and quantity both decrease What Happens When the Supply Curve Shifts? • When supply decreases, the equilibrium price increases and the equilibrium quantity decreases What Happens When the Supply Curve Shifts? • When supply increases, the equilibrium price decreases and the equilibrium quantity increases Simultaneous Shifts of Supply and Demand • When demand increases and supply decreases the equilibrium price definitely increases, but quantity is ambiguous Simultaneous Shifts of Supply and Demand • When demand decreases and supply increases the equilibrium price definitely decreases, but quantity is ambiguous Simultaneous Shifts of Supply and Demand • When demand and supply increase, the change in equilibrium price is ambiguous, but equilibrium quantity definitely increases Simultaneous Shifts of Supply and Demand • When demand and supply decrease, the change in equilibrium price is ambiguous, but equilibrium quantity definitely decreases
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