Short-Run Equilibrium in a Competitive Market
Changes in any of the variables, other than price, that influence quantity
demanded or supplied will cause a shift in the demand curve, the supply
curve, or both. There are four possible shifts: an increase in demand (a
rightward shift in the demand curve), a decrease in demand (a leftward
shift in the demand curve), an increase in supply (a rightward shift in the
supply curve), and a decrease in supply (a leftward shift in the supply
curve).
Many commodities like those listed here are actively traded in
international markets and their equilibrium prices fluctuate daily.
Source:https://web.tmxmoney.com/futures.php?locale=EN Based on the data from “Commodities & Futures,” TMX Money,. Accessed August 27, 2018.
To discover the effects of each of the possible curve shifts, we use the
method known as comparative statics. With this method, we derive
predictions about how the endogenous variables (equilibrium price and
quantity) will change following a change in a single exogenous variable
(the variables whose changes cause shifts in the demand and supply
curves). We start from a position of equilibrium and then introduce the
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