Concept: Market Equilibrium

This graph shows a typical set of supply and demand curves. Use a copy of this graph to do the following:

1. Label the equilibrium as point A. Then, determine the equilibrium price and quantity.

2. Suppose that there is an increase in the number of buyers in this market. Determine which curve or curves is affected and show what the new equilibrium would look like. Label the new equilibrium as point B.

3. Finally, suppose that producers in the market come to expect a lower price in the future. Determine which curve or curves would be affect, and show what the new equilibrium would look like. Label this equilibrium as point B.