Basic Graphing of Supply and Demand Changes
Assume a Market Already Exists (Supply and Demand Curves)
Price is
Increased
First
Graph A:
Price is
Decreased
First
Graph B:
Demand is
Increased
First
Graph C:
Demand is
Decreased
First
Graph D:
Supply is
Increased
First
Graph E:
Supply is
Decreased
First
Graph F:
Circle the
correct
responses:
QD will
increase
decrease
QS will
increase
decrease
Therefore:
a
surplus
shortage
will be
created
Circle the
correct
responses:
QD will
increase
decrease
QS will
increase
decrease
Therefore:
a
surplus
shortage
will be
created
Circle the
correct
responses:
D will
increase
decrease
QS will
increase
decrease
Therefore:
EP will
increase
decrease
Circle the
correct
responses:
D will
increase
decrease
QS will
increase
decrease
Therefore:
EP will
increase
decrease
Circle the
correct
responses:
S will
increase
decrease
QD will
increase
decrease
Therefore:
EP will
increase
decrease
Circle the
correct
responses:
S will
increase
decrease
QD will
increase
decrease
Therefore:
EP will
increase
decrease
Therefore:
EQ will
increase
decrease
Therefore
EQ will
increase
decrease
Therefore
EQ will
increase
decrease
Therefore
EQ will
increase
decrease
Basic Supply and Demand Graphing: Problems
Assume markets already exist.
Assume ceteris paribus.
Show only the first change to occur
Watch out for Substitutes and Complements
Product being
Event/Change in
Which thing
Which graph (A
graphed
the market
changed first?
through E)?
List the change in
EP, EQ
1. Toyota Tundra Toyota shuts down Don’t worry about
Trucks
the San Antonio
F
this.
Production Plant
1. Toyota
The cost of
Decrease in
Tundra Trucks gasoline goes to
demand D
$10 a gallon
complement
Roll Royce Luxury Average income in
Increase in
Cars
the US triples in
demand- normal
C
one year
good
Honda Civic Cars Honda announces, Increase in quantity
“Buy 1 Get 1 Free”
demanded B or C
basically a price cut
Hamburgers
The price of all
Depends on
vegetables triple
whether veggies are
C or D
(lettuce, ….)
a complement or
substitute
Hot dogs
Prices of charcoal
Increase in
for grilling drops in
demandC
half
complement
Coca Cola
The price of all
Increase in
Pepsi products
C
demand- substitute
triples
1. Batteries
A major hurricane
Increase in
enters the western
C
demand- tastes
Gulf of Mexico
Toys
It is now December
Decrease in
26th
D
demand- tastes
Plastic Products
The price of crude
oil falls
dramatically
Increase in supplyresource price
E
Basic Market Changes in Supply and Demand or Quantity Supplied and Demanded
(Assume Ceteris Paribus.) (Show only the First Change.) (Assume a market exists.)
(Watch out for Complementary Goods/Substitute Goods.)
Product to Graph
Event
Graph Showing the
Explain your logic
and tell the result.
(List the Letter from the
note page.)
1.
Ford Cars
1. Ford Cars
Lexus Cars
Hamburgers
Hot dogs
Nintendo DS2 game
systems
Tylenol tablets
Wii consoles
Bicycles
Corn for food
Apples
Bread
Foreign Cars
Plastic products
Men’s hats
New robots are able to
build cars quicker
Cost of steel doubles
National income for
US workers doubles
Prices of pork doubles
across all stores
Prices of charcoal drops
in half
Nintendo introduces the
DS3 system
The CDC says Tylenol
use causes cancer
Wii drops the price in
half
Gasoline prices jump to
$7.00 a gallon
The Gov. mandates the
use of ethanol in cars
Apples prices double
world wide
Fuel prices for farmers
triple
US Gov puts in strict
quotas on imports
Crude oil prices fall
dramatically
Research shows that
hair coverings slow hair
loss
E
F
Technology makes
costs lower
Resource costs
increase
C
Normal good
C or F
C-substitute
F- another good
C
Complement
D
Tastes
D
Tastes
B
The price of our
item.
C
Substitute
F
Another good
A
The price of our
item.
F
Resource price
F
Don’t worry about
this.
E
Resource price
C
Tastes