(Econ) 4 questions.

>> In this feature we're going to look at an exhibit   in Chapter 3 titled Equilibrium Price and Quantity Effects   of Supply Curve Shifts and Demand Curve Shifts.   So, let's look at a market setting beginning here with Q   and P on our axis, price and quantity on our axis   and let's have a downward sloping demand curve, D1,   and upward sloping supply curve, S1, and let's go ahead   and mark the equilibrium at point one.   The equilibrium price is P1 and the equilibrium quantity is Q1.   Now, let's change something on the buying side of the market.   Let's have demand increase and see what happens   to the price and quantity.   Well, if demand increases we know   that the demand curve is going to shift to the right,   so let's go ahead and shift that to the right   and now let's identify our new equilibrium at point two.   There's a new equilibrium price, P2,   and there's a new equilibrium quantity, Q2.   So an increase in demand ends up increasing the equilibrium price   and increasing the equilibrium quantity.   Let's start with our market situation one more time   and this time we're going to change supply.   So, here's our demand curve and our supply curve,   initial equilibrium at one with equilibrium quantity Q1   and the equilibrium price P1.   Now, let's have a supply decline,   so a supply of a product is going to decline.   What does that mean in terms of the supply curve?   Well, if supply goes down, supply declines.   That means the supply curve shifts leftward,   so S1 to S2 where we identify our new equilibrium point   as point two and that comes with a higher equilibrium price   and a lower equilibrium quantity.   Now on our third example, let's change both demand   and supply at the same time.   So, here's our market again, demand curve, supply curve,   equilibrium at point one, equilibrium price P1,   and equilibrium quantity Q1.   Let's have demand increase and let's have supply decrease   and let's have the change in demand be greater than--   let me put a greater than sign-- than the change in supply.   So we're going to have demand increase, so what does that mean   in terms of the demand curve?   The demand curve has to shift to the right.   All right, so we're shifting it to the right and supply is going   down so that means the supply curve shifts to the left   but we have to make sure that we don't shift that supply curve   to the left as much   as the demand curve shifted to the right.   So, let's shift that right here,   I'm going to make it a small shift in comparison, S1 to S2.   All right, so notice our demand shift here is bigger   than our supply shift and that's because we said demand was going   to increase by more than supply decreases.   Well, where is our new equilibrium?   Our new equilibrium is right here at the intersection of D2   and S2, that's at point two, and that new equilibrium goes   with a higher equilibrium price   and a higher equilibrium quantity.   All right, let's do another one.   We start off in equilibrium again in a market setting   and with our demand curve, D1, and our supply curve, S1,   equilibrium at point one, equilibrium price, P1,   equilibrium quantity, Q1.   Let's have demand increase, supply decrease,   and let's have them change by the same amount.   So a demand is going to increase by the same amount   that supply decreases.   Well, if demand increases then demand curve is going to shift   to the right, so we'll shift that to the right.   And if supply decreases, supply is going to shift to the left.   So let's have supply shift to the left but we have to shift it   to the left by the same amount   that demand shifted to the right.   That means it has to go through S2   and our new equilibrium is point two here   at a higher price level.   But notice that there is no change here in quantity.   That's because the demand and supply changed   by the same amount but in opposite directions.   So this time, price goes up, equilibrium price goes up   but there is no change in quantity, all right.   So, what are we talking about in this feature?   We're saying that changes in demand can lead to changes   in price and changes in quantity or changes in supply can lead   to changes in price and changes in quantity   or we could have changes in demand plus changes   in supply leading to changes in price   and possibly changes in quantity.