University:
North Central College
Course:
ECON 205 | Principles of Macroeconomics
Academic year:

2020
Views:

232

Pages:

3
Author:

SpaceCadet101

Shifting Curves and Change in Equilibrium Directions: Read Chapter 6 Section 1 Price per Toothbrush (in dollars) Price per Toothbrush (in dollars) Quantity Demanded Quantity Supplied 0.10 200 5,000 0.20 500 4,000 0.25 1,000 3,500 0.30 1,750 2,875 0.35 2,500 2,500 0.40 3,250 1,750 0.45 4,125 1,125 0.50 5,200 750 0.55 6,500 250 Scenario #1: Change in Consumer Preference Factor: Dentists recommend brushing teeth less frequently. Effect on Demand: Decrease in demand. Explanation: As people brush their teeth less, the demand for toothbrushes will decrease. New Equilibrium Price: The price will decrease as demand decreases. Graph: A leftward shift in the demand curve. Scenario #2: Change in Consumer Expectations Factor: High-fluoride toothpaste reduces cavities. Effect on Demand: Increase in demand. Explanation: As people become aware of the benefits of high-fluoride toothpaste, they will demand more toothbrushes. New Equilibrium Price: The price will increase as demand increases. Graph: A rightward shift in the demand curve. Key Points from the Graphs: Supply Curve: Remains constant in both scenarios. Demand Curve: Shifts leftward in Scenario 1 and rightward in Scenario 2. Equilibrium Point: Changes due to the shift in the demand curve. Price and Quantity: The new equilibrium price and quantity are determined by the intersection of the new demand curve and the supply curve. Scenario #3: Technological Advancement Factor: New technique in plastic mold making. Effect on Supply: Increase in supply. Explanation: The new technique makes it easier and cheaper to produce toothbrushes, leading to an increase in supply. New Equilibrium Price: The price will decrease as supply increases. Graph: A rightward shift in the supply curve. Scenario #4: Labor Strike Factor: Factory workers strike. Effect on Supply: Decrease in supply. Explanation: The strike disrupts production, leading to a decrease in the supply of toothbrushes. New Equilibrium Price: The price will increase as supply decreases. Graph: A leftward shift in the supply curve. Key Points from the Graphs: Demand Curve: Remains constant in both scenarios. Supply Curve: Shifts rightward in Scenario 3 and leftward in Scenario 4. Equilibrium Point: Changes due to the shift in the supply curve. Price and Quantity: The new equilibrium price and quantity are determined by the intersection of the new supply curve and the demand curve. These 1 scenarios demonstrate how technological advancements and labor disruptions can impact market supply and, consequently, equilibrium prices and quantities.

Shifting Curves and Change in Equilibrium

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