pg-11

Below we again use tabular data, but here we examine the effects of a change in the supply relationship. The table labeled Original Equilibrium shows a market where the equilibrium price is 15 and the equilibrium quantity is 30. A shift out (increase) in supply leads to numbers such as those in the table labeled Supply Increase, where the quantity supplied is higher at every price. This causes the equilibrium price to fall to 10 and the equilibrium quantity to increase to 40. In the table labeled Supply Decrease, we show the effect of a shift back in supply. This causes the equilibrium price to rise to 20 and the quantity to fall to 20.

These results are consistent with those found from both our graphical and mathematical analysis.

Original
Equilibrium
    Supply
Increase
    Supply
Decrease
Market
Price
Quantity
Demanded
Quantity
Supplied
0 60 0
5 50 10
10 40 20
15 30 30
20 20 40
25 10 50
  
Market
Price
Quantity
Demanded
Quantity
Supplied
0 60 0
5 50 20
10 40 40
15 30 60
20 20 80
25 10 100
  
Market
Price
Quantity
Demanded
Quantity
Supplied
0 60 0
5 50 5
10 40 10
15 30 15
20 20 20
25 25 50
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