Chapter 3W - Web appendix: Additional examples of supply and demand. This appendix focuses on changes in supply and demand and the subsequent effect on equilibrium price and equilibrium quantity.
Chapter 3W McGrawHill/Irwin Web Appendix: Additional Examples of Supply and Demand Copyrightâ2014byTheMcGrawưHillCompanies,Inc.Allrightsreserved Appư3ư1 1ư1 Lettuce Supply shifts left for lettuce • Weather destroys part of the crop Demand doesn’t change • Consumers still want as much lettuce as before Equilibrium price rises, which will reduce the quantity demanded App 32 Lettuce S2 Price (per pound) S1 P2 P1 D1 Q2 Q1 Quantity (pounds) App 33 Exchange Rates • Exchange rates — the price of one country’s currency in terms of another country’s currency • Currency appreciation • Currency depreciation App 34 Dollar Price of Euro Exchange Rates S1 $1.50 $1.25 D2 D1 Q Q2 Quantity of Euros LO6 App 35 Pink Salmon • Supply shifts right for pink salmon • New technology • New fishers enter the industry • Demand shifts left for pink salmon • Increases in consumer’s income • Reductions in the price of substitutes App 36 Pink Salmon S1 Price (per pound) S2 P1 P2 D2 D1 Q1 Q2 Quantity (in pounds) App 37 Gasoline • Supply of gasoline decreases • Refinery breakdowns • Mideast politics and warfare • Rising price of oil • Demand for gasoline increases • Consumers’ incomes increased • Low-mileage SUVs popular App 38 Gasoline Price (per gallon) S2 S1 P2 P1 D2 D1 Q Q2 Quantity (in gallons) LO6 App 39 Sushi • Supply shifts right • Increase in the number of sushi • bars Demand shifts right • Consumers’ tastes for sushi increase App 310 Sushi S1 Price (per pound) S2 P1 D2 D1 Q1 Q2 Quantity (pounds) App 311 Preset Prices • Preset prices can cause market • • LO6 imbalances Olympic figure skating finals • Preset price results in a shortage of tickets Olympic curling preliminaries • Preset prices result in a surplus of tickets App 312 Preset Prices P S P2 b P1 a Shortage D Q1 Q2 Quantity (tickets) Figure Skating Price (per ticket) Price (per ticket) P S Surplus P2 a b P1 D Q2 Q1 Quantity (tickets) Curling App 313 ... • Exchange rates — the price of one country’s currency in terms of another country’s currency • Currency appreciation • Currency depreciation App 34 Dollar Price of Euro Exchange Rates S1 $1.50... income • Reductions in the price of substitutes App 36 Pink Salmon S1 Price (per pound) S2 P1 P2 D2 D1 Q1 Q2 Quantity (in pounds) App 37 Gasoline • Supply of gasoline decreases • Refinery breakdowns... Refinery breakdowns • Mideast politics and warfare • Rising price of oil • Demand for gasoline increases • Consumers’ incomes increased • Low-mileage SUVs popular App 38 Gasoline Price (per gallon)