Review Figure 3.9 its analysis of the market for premium bottled water. The figure shows several different changes occurring: (a) a shift in a curve, (b) some event external to the market that affects the market, (c) and a new equilibrium. What is the order in which these three different changes occur? In the analysis of other markets that you will carry out later in the course, must the order of these three changes stay the same as in this example, or can the order be different?

Figure 3.9

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Price (dollars per bottle) Supply 1. As income increases, demand shifts to the right... P2 P1 2. ... increasing the equilibrium price... D1 D2 Q1 Q2 Quantity (millions of bottles per day) 3. ... and also increasing the equilibrium quantity.