Changes in Supply and Demand
Read this article to learn more about how changes in supply and demand affect the market price equilibrium. Make sure to answer the "Try It" questions.
Changes in Supply and Demand
Try It
Question 1
Try graphing each of these situations to determine if they cause a shift in demand, quantity demanded, supply, or quantity supplied.
The cost of rubber used to produce tires falls by 20%. This will result in ________ for tires.
- an increase in the quantity demanded
- a decrease in demand
- an increase in demand
Question 2
A recent study reveals that raisins are a natural aphrodisiac. This will likely result in ________ for raisins.
- only a decrease in the quantity demanded
- only an increase in the quantity demanded
- an increase in demand
Question 3
An unexpected government tax rebate has given all the residents in your town $1,000 of extra income. This will result in ________ for goods at the local retail store.
- an increase in the quantity supplied
- anly an increase in quantity demanded
- an increase in supply
Question 4
A recent pork shortage has increased its price by 25% on the world market. As an avid fan of hot dogs you would expect ________.
- a decrease in demand
- anly a decrease in the quantity supplied
- a decrease in supply