Economics Micro & Macro (CliffsAP)

Illustrations of Shifts in Supply and Demand

You’ll notice that a properly illustrated shift in supply is shown with correctly labeled price and quantity changes. P1
stands for the original price, and P2symbolizes the new or changed price. Q1is the original quantity; Q2is the new or
adjusted quantity. In Figure 2-8, there is an increase in supply, illustrated by a shift of the supply curve to the right.

Figure 2-8

To become better at recognizing what changes demand and what does not, read the headlines for the next few graphs
(Figure 2-9) and decide if there will be an increase, a decrease, or no change in demand. Be sure to draw a shift if there
is an increase or decrease in demand, and explain which determinant was responsible for the shift.

Figure 2-9 (continues)

S

D

The Price Of Hotdogs Goes Up.

S D.

D

The Price Of Hamburgers Goes Down.

C.

S

D

The Price Of Hotdog Buns Goes Up.

S B.

D

Teenagers Like Hotdogs.

A.

S^1

P^1

P^2

S^2

Price

Q^1 Q^2 Quantity

Supply and Demand