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Demand Curve
B C
2.00
D1 D2
D2
D1
Quantity
8
Movements along & shifts of
Demand Curve
Price
Entire demand curve shifts
leftward when:
income or wealth
price of substitute
price of complement
population
expected price
tastes shift toward good
D1
D2
Quantity
9
Supply Curve
4.00 G
E
3.00 4. until price reaches its
equilibrium value of 3.00
.
H
1.00 J
Excess Demand
D
25,000 50,000 75,000 Number of Bottles
1. At a price of 1.00 per
bottle an excess demand per Month
of 50,000 bottles . . .
17
Excess Supply and Price Adjustment
D
35,000 50,000 65,000 Number of Bottles
per Month
18
Price Quantit Quantit State of Pressur
(per y of y of Market e on
suite/ suites suites price
night) demand supplie
ed d
4000 1 7 Surplus
3500 3 5 Surplus
3000 4 4 Equilibri Neutral
um
2000 6 2 Shortag
e
Demand shift
D2
D1