Objectives Explain the law of demand Change in quantity demanded Change in demand.
Chapter 6 Section 2. Shortage – firms will raise prices ◦ Quantity supplied will rise; quantity...
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Shifts in Market Equilibrium Chapter 6 Section 2
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Transcript of Chapter 6 Section 2. Shortage – firms will raise prices ◦ Quantity supplied will rise; quantity...
![Page 1: Chapter 6 Section 2. Shortage – firms will raise prices ◦ Quantity supplied will rise; quantity demanded will fall; until both are equal Surplus –](https://reader036.fdocuments.us/reader036/viewer/2022071808/56649f045503460f94c18674/html5/thumbnails/1.jpg)
Shifts in Market Equilibrium
Chapter 6 Section 2
![Page 2: Chapter 6 Section 2. Shortage – firms will raise prices ◦ Quantity supplied will rise; quantity demanded will fall; until both are equal Surplus –](https://reader036.fdocuments.us/reader036/viewer/2022071808/56649f045503460f94c18674/html5/thumbnails/2.jpg)
Shortage – firms will raise prices◦ Quantity supplied will rise; quantity demanded
will fall; until both are equal Surplus – firms will lower prices
◦ Quantity supplied will fall; quantity demanded will rise; until both are equal
Moving Toward Equilibrium
![Page 3: Chapter 6 Section 2. Shortage – firms will raise prices ◦ Quantity supplied will rise; quantity demanded will fall; until both are equal Surplus –](https://reader036.fdocuments.us/reader036/viewer/2022071808/56649f045503460f94c18674/html5/thumbnails/3.jpg)
Technology, Government (Taxes and Subsidies), and change in price of input
What Happens to the Supply Curve
What happens with a decrease in supply?
An Increase In Supply
![Page 4: Chapter 6 Section 2. Shortage – firms will raise prices ◦ Quantity supplied will rise; quantity demanded will fall; until both are equal Surplus –](https://reader036.fdocuments.us/reader036/viewer/2022071808/56649f045503460f94c18674/html5/thumbnails/4.jpg)
The “Shortage” Problem ◦ usually the new
must-buy item What happens to
the Supply Curve What happens in a
decrease in demand?
An Increase in Demand