Why Do Prices Change? SHIFTS IN DEMAND If there is a change in any of the...

 

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Why Do Prices Change? SHIFTS IN DEMAND If there is a change in any of the four determinants of demand - tastes, incomes, prices and availability of substitutes and complements, population sze - there will be a shift in the demand SHIFTS IN SUPPLY A change in production costs results in a shift in the supply schedule. If production costs increase, less will be supplied at each and every price. Price schedule. An cecrease in demand means tnat at each and every price less would be purchased than previously. Price 0. Quantity TI-| Quantity (See page vi in the foreword "To the Student" for how to make the best use of this schematic outline.) 3.5. Identify the causes of shifts in demand and how they affect market equilibrium. A. List the four determinants that cause a shift in the demand schedule. 1. 2. 3. 4. B. Circle the correct answer within the parentheses. 1. Other things held constant, an increase in population would cause (an increase/a decrease) in the equilibrium price of baby products and (an increase/a decrease) in the equilibrium quantity purchased. 2. Other things held constant, the release of a report showing chocolate to be poisonous would cause (an increase/a decrease) in the equilibrium price of chocolate and (an increase/ a decrease) in the equilibrium quantity purchased. Why Do Prices Change? SHIFTS IN DEMAND If there is a change in any of the four determinants of demand - tastes, incomes, prices and availability of substitutes and complements, population sze - there will be a shift in the demand SHIFTS IN SUPPLY A change in production costs results in a shift in the supply schedule. If production costs increase, less will be supplied at each and every price. Price schedule. An cecrease in demand means tnat at each and every price less would be purchased than previously. Price 0. Quantity TI-| Quantity (See page vi in the foreword "To the Student" for how to make the best use of this schematic outline.) 3.5. Identify the causes of shifts in demand and how they affect market equilibrium. A. List the four determinants that cause a shift in the demand schedule. 1. 2. 3. 4. B. Circle the correct answer within the parentheses. 1. Other things held constant, an increase in population would cause (an increase/a decrease) in the equilibrium price of baby products and (an increase/a decrease) in the equilibrium quantity purchased. 2. Other things held constant, the release of a report showing chocolate to be poisonous would cause (an increase/a decrease) in the equilibrium price of chocolate and (an increase/ a decrease) in the equilibrium quantity purchased.