Price Adjustment:

Directions:

• Graph it and label everything (D1, D2, S1, S2, P1, P2, Q1, Q2, shift arrows, etc.), including shortages or surpluses
• If a shift in demand and/or supply has taken place, identify the change and list the determinant.
• If a change in price has taken place, identify whether a surplus or a shortage now exists. (Shade in the area representing the surplus or shortage.

1.Joe's shoe shop raises prices from the equilibrium price of $40 a pair to its new price of $60 a pair. (Shoes)

2. A small town of 1,000 people increases its population by 2,000.The grocery store raises its prices to match the new equilibrium price point. (Grocery Store G&S)