Price
Technology
Input costs
Government
regulations
Business expectations
Quantity
McGraw-Hill
Educa0on,
2014
Market equilibrium
Market equilibrium is at E0
where quantity
demanded equals
quantity supplied . The
equilibrium price is P0
and quantity Q0
Price
P0
E0
D
Q0
Quantity
Price
P0
P1
A
B
D
Q0 Q1 Quantity
McGraw-Hill
Educa0on,
2014
Price
P0
P1
A
B
Q0 Q1 Q2 Q3
Price
A shift in demand
D1
D0
P0
P1
E0
E1
Q1 Q0
A shift in supply
Price
S1
D
S0
E2
P1
P0
E0
S0
D
Q1 Q0
Suppose safety
regulations are tightened,
increasing producers costs
Quantity