Shifts in Supply or Demand Curve

Draw a correct graph, showing

which curve shifted and what happened

to price and quantity.

Market: Coffee

Bountiful crop of Coffee Beans

Supply increases, shifts to the right

Price falls, quantity increases

Market: Automobile Industry

Workers in the Automobile Industry receive a pay raise.

Supply shifts to the left because of input costs

risingPrice increases, quantity

falls

Market: Computer software

Price of personal computers fall

Demand shifts to the right because of the

price of a complement falls

Price rises, quantity increases

Market: Pepsi Cola

Price of Coca Cola rises

Demand for Pepsi increases because the price of a substitute

good risesprice increases, quantity

increases

Market: Second Hand Clothing

National Incomes Rise

Demand shifts to the left because the change in

income causes a decrease in demand for

an inferior goodprice falls, quantity falls

Market: Automobile Industry

Government gives GM and Chrysler a subsidy

Supply shifts to the right because of a change in

government policiesprice falls, quantity

increases

Market: Corn

Price for irrigation equipment falls

Supply increases because of a change in

technologyprice falls, quantity

increases

Market: Any normal good

American’s Income falls 3 months in a row

Demand increases because incomes rising and increase in demand

for normal goodsprice falls, quantity

decreases

Market: TV Manufacturing

American TV production closes its manufacturing

plant

Supply shifts left because of decrease in number of producers in

the marketprice increases, quantity

falls

Market: Any Inferior Good

American’s income rises 3 months is a row

Demand decreases because as incomes rise,

there is a decrease in demand for inferior

goodsprice falls, quantity falls