2 123 56 QUANTITY Demand As you can see by the changes on the graph in this case, the in the demand curve. Equilibrium price Equilibrium quantity Use the following table to indicate the changes in equilibrium graph. Increase Decrease No Char O O O O
2 123 56 QUANTITY Demand As you can see by the changes on the graph in this case, the in the demand curve. Equilibrium price Equilibrium quantity Use the following table to indicate the changes in equilibrium graph. Increase Decrease No Char O O O O
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:**Text Transcription for Educational Website:**
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Suppose there is an increase in demand and an increase in supply.
Adjust the following graph to reflect the new market conditions. Then, answer the questions that follow.
**Graph Explanation:**
The graph presented is a supply and demand graph that helps illustrate market equilibrium. It features two primary lines:
1. **Supply Line:** This is an upward-sloping orange line. It starts from a lower quantity at a lower price and moves to a higher quantity as the price increases.
2. **Demand Line:** This is a downward-sloping blue line. It starts from a higher quantity at a lower price and moves to a lower quantity as the price increases.
**Axes:**
- The horizontal axis represents the **Quantity** of goods.
- The vertical axis represents the **Price** of the goods.
**Intersection Point:**
The point where the supply and demand lines intersect is known as the equilibrium point. This point indicates the market equilibrium price and quantity in the absence of shifts in supply or demand.
**Legend:**
- The dashed orange line represents changes in Supply.
- The dashed blue line represents changes in Demand.
**Notes:**
Adjustments in either the demand or supply curve due to external factors will shift the equilibrium point, thus affecting both the price and quantity in the market.
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![**Title: Understanding Shifts in Supply and Demand Curves**
As you can see by the changes on the graph, in this case, the magnitude of the shift in the supply curve is:
[Graph Description]
- A graph with Price on the vertical axis and Quantity on the horizontal axis.
- The graph displays two lines:
- Supply (orange line) moving from higher price and lower quantity to lower price and higher quantity.
- Demand (blue line) moving from lower price and higher quantity to higher price and lower quantity.
- Both lines intersect at an equilibrium point.
[Instruction]
Use the following table to indicate the changes in equilibrium price and quantity that result from the shifts in supply and demand.
| | Increase | Decrease | No Change |
|----------------------|----------|----------|-----------|
| Equilibrium price | | | |
| Equilibrium quantity | | | |
- Select the appropriate option for the changes in equilibrium price and quantity.
[Button: Save & Continue]
This table helps in analyzing the effect of shifts in supply and demand on equilibrium price and quantity. Adjust your selections based on the shifts observed in the graph.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F127f63d9-8f89-4c37-8cc0-122cae65c6f1%2F8861d893-d389-4470-83bf-c6f9c29808cd%2Fr5iegu6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Title: Understanding Shifts in Supply and Demand Curves**
As you can see by the changes on the graph, in this case, the magnitude of the shift in the supply curve is:
[Graph Description]
- A graph with Price on the vertical axis and Quantity on the horizontal axis.
- The graph displays two lines:
- Supply (orange line) moving from higher price and lower quantity to lower price and higher quantity.
- Demand (blue line) moving from lower price and higher quantity to higher price and lower quantity.
- Both lines intersect at an equilibrium point.
[Instruction]
Use the following table to indicate the changes in equilibrium price and quantity that result from the shifts in supply and demand.
| | Increase | Decrease | No Change |
|----------------------|----------|----------|-----------|
| Equilibrium price | | | |
| Equilibrium quantity | | | |
- Select the appropriate option for the changes in equilibrium price and quantity.
[Button: Save & Continue]
This table helps in analyzing the effect of shifts in supply and demand on equilibrium price and quantity. Adjust your selections based on the shifts observed in the graph.
Expert Solution
Step 1: Define the Demand curve and Supply curve
The demand curve is a downward-sloping curve from left to right showing an inverse relationship between price and demand.
The supply curve is an upward-sloping curve from left to right showing a positive relationship between price and supply.
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