Additional Examples of Demand and Supply
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Transcript of Additional Examples of Demand and Supply
Chapter 3A
Additional Examples of Supply and Demand
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
3A-2
Lettuce
• Supply shifts left for lettuce• Weather destroys part of the crop
• Demand doesn’t change• Consumers still want as much lettuce as
before• Equilibrium price rises which will reduce the
quantity demanded
LO7
3A-4
Exchange Rates
• Exchange rates are the price of one country’s currency in terms of another country’s currency
• Currency appreciation• Currency depreciation
LO7
3A-6
Pink Salmon
• Supply shifts right for pink salmon• New technology• New fishers enter the industry
• Demand shifts left for pink salmon• Increases in consumers’ income• Reductions in the price of substitutes
LO7
3A-8
Gasoline
• Supply of gasoline decreases• Refinery breakdowns• Mideast politics and warfare• Rising price of oil
• Demand for gasoline increases• Consumers’ incomes increased• Low mileage SUVs popular
LO7
3A-10
Sushi
• Supply shifts right• Increase in the number of sushi bars
• Demand shifts right• Consumers’ tastes for sushi increases
LO7
3A-12
Land in San Francisco
• Vertical supply curve• Quantity supplied fixed and unresponsive to
price changes• Demand increase causes price to rise but
quantity stays the same• Demand decrease causes price to fall but
quantity stays the same• Explains high real estate prices in cities
LO7
3A-14
Preset Prices
• Preset prices can cause market imbalances• Olympics figure skating finals
• Preset price results in a shortage of tickets• Olympics curling preliminaries
• Preset prices result in a surplus of tickets
LO7