level of income
increase in demand
an increase in the level of income will lead to a shift in the demand curve to the right from D1 to D2 known as an increase in demand. As a result, at price P1, the quantity demanded has increased from Q1 to Q2 indicating that an increase in the demand curve leads to an increase in quantity at the same price
expected future price decrease
decrease in demand
an expected decrease in the future price of a good will lead to a shift in the demand curve to the left from D1 to D2 known as a decrease in demand. As a result, at price P1, the quantity demanded has decreased from Q1 to Q2 indicating a decrease in quantity demanded at the same price
increase in price
movement up the demand curve
an increase in the price of a good from P1 to P2 will lead to a contraction in the quantity demanded from Q1 to Q2
movements down the demand curve
A decrease in the price of a good from P1 to P3 will lead to a expansion in the quantity demanded from Q1 to Q3
decrease in price
movement up the demand curve
An increase in the price of a good from P1 to P2 will lead to a contraction in the quantity demanded from Q1 to Q2
movement up the supply curve
An increase in the price of a good from P1 to P3 will lead to an expansion in the quantity supplied from Q1 to Q3. This indicates that an increase in the price of a good leads to an increase in the quantity supplied
movement up the supply curve
A decrease in the price of a good from P1 to P2 will lead to an expansion in the quantity supplied from Q1 to Q3. This indicates that an increase in the price of a good leads to an increase in the quantity supplied
movement down the supply curve
An increase in the price of a good from P1 to P3 will lead to an expansion in the quantity supplied from Q1 to Q3. This indicates that an increase in the price of a good leads to an increase in the quantity supplied
increase in cost of fop
Decrease in supply
an increase in the cost of the factors of production will lead to a shift in the supply curve to the left from S1 to S2 known as an decrease in supply. Now, at price P1, the quantity supplied has decreased from Q1 to Q2. This indicates that an decrease in the supply curve leads to an decrease in the quantity supplied at the same price.
decrease in wages
Increase in supply
a decrease in the wages of workers will lead to a shift in the supply curve to the right from S1 to S2 known as an increase in supply. Now, at price P1, the quantity supplied has increased from Q1 to Q2. This indicates that an increase in the supply curve leads to an increase in the quantity supplied at the same price.
Excess supply
At price P2, there is excess supply for the good (more people are willing to supply than people are willing to buy). To reach an equilibrium price where supply equals demand, supply will contract to the lower price while demand will expand. The market will end up at an equilibrium price, PE and at an equilibrium quantity, QE. At this price, the market has cleared and there is no tendency to change.
market equillibrium
Excess demand
At price P1, there is excess demand for the good (more people are willing to buy than people are willing to supply). To reach an equilibrium price where supply equals demand, supply will expand to the higher price while demand will contract. The market will end up at an equilibrium price, PE and at an equilibrium quantity, QE. At this price, the market has cleared and there is no tendency to change.
