Chapter 3A

Additional
Examples
of Supply and
Demand
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 Lettuce

Supply shifts left for lettuce

Weather destroys part of the crop
Demand doesnt change
Consumers still want as much
lettuce as before
Equilibrium price rises which will
reduce the quantity demanded

LO 3A-2
 Lettuce

S2
Price (per pound)

S1

P2

P1

D1

0
Q2 Q1

Quantity (pounds)
LO 3A-3
 Exchange Rates

Exchange rates are the price of one

countrys currency in terms of
another countrys currency
Currency appreciation
Currency depreciation

LO 3A-4
 Exchange Rates
Dollar price of 1 euro

S1

$1.50

$1.25

D2

D1

0
Q1 Q2
Quantity of euros
LO 3A-5
 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

LO 3A-6
 Pink Salmon

S1
Price (per pound)

S2

P1

P2

D2 D1

0
Q1 Q2

Quantity (in pounds)

LO 3A-7
 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

LO 3A-8
 Gasoline

S2
S1
Price (per gallon)

P2

P1
D2

D1

0
Q1 Q2

Quantity (in gallons)

LO 3A-9
 Sushi

Supply shifts right

Increase in the number of sushi
bars
Demand shifts right
Consumers tastes for sushi
increases

LO 3A-10
 Sushi

S1
Price (per pound)

S2

P1

D2

D1

0
Q1 Q2

Quantity (pounds)
LO 3A-11
 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

LO 3A-12
 Land in San Francisco

S1
Price (per acre)

P2

P1

D2

D1

0
Q0
Quantity of land (acres)
LO 3A-13
 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
LO 3A-14
 Preset Prices

P P
S
Price (per ticket)

Price (per ticket)

Surplus
a
P2 b
P2

P1
b a
P1
Shortag
0 D D
e 0
Q1 Q2 Q2 Q1
Figure Skating Curling
Quantity (tickets) Quantity (tickets)

LO 3A-15