Unit 2:
Supply & Demand
Together!!!
2
Market Equilibrium = Q.D. = Q.S.
Price
Price
Price
S
S
23
D
Quantity
D
Quantity
15
Quantity
Shortage
Surplus
Demand > Supply
Supply > Demand
Price
Price
S
S
D
D
Quantity
Quantity
Price Ceiling
Effective
Non-Effective
Price
Price
P.C.
P.C.
Quantity
Quantity
Price Floor
Non-Effective
Price
Effective
Price
P.F.
P.F.
Quantity
Quantity
Chocolate Milk is proven to cure cancer; however,
half of the population of cows die from mad cow
disease.
How does this information affect the price and
quantity of chocolate milk?
Price
S
D
Quantity
Pho is proven to increase the rates of heart attacks,
and three new Pho restaurants open in the area.
How would this information affect the price and
quantity of Pho?
Price
S
D
Quantity
The price of chips increases, and 3 factories that
produce salsa blew up at the same time.
How would this information affect the price and
quantity of salsa?
Price
S
D
Quantity
Chicken farms invented faster method to raise
chickens; more than half million Chinese immigrate
to the city.
How does this information affect the price and
quantity of orange chicken?
Price
S
D
Quantity
Use a S&D to explain this double shift
13