need to chugg it downn

Question 1

how does an increase in supply affect the market price and quantity?

Answer 1

(change in any of its non-price determinants) caused an increase in supply. Graphically, this is represented by a rightward shift of the supply curve from S0 to S1. Increase in supply, holding demand constant, creates a surplus Q0Q2 at the original price P0. To remove surplus, firm cut prices.

As price falls, Qd rises while Qs falls.

The process will continue until price eventually reaches P1 where Qd = Qs and the surplus is eliminated, removing further pressure on the market to adjust. The equilibrium quantity rises from original Q0 to a higher Q1

Use this format:
1. non-price determinant factor explained, how it affects supply/demand curve, shift from to,
2. surplus/shortage
3. to remove surplus, firm cut prices. to remove shortage, buyers bid up good
4. how Qd and Qs move
5. this process will continue until it reaches P1, where Qd = Qs.
6. eliminate surplus/shortage
7. new Eq

Question 2

If both demand and supply curve increase/decrease

Answer 2

must see which one increase to a greater extent. if d>s, shortage. if s>d, surplus

decrease is vice versa

Question 3

if both demand and supply curve go diff ways like one of them increase and the other decrease?

Answer 3

must see PED/PES. choose only 1 to talk abt then can conclude Eq and Ep

Question 4

how to find consumer expenditure and producer revenue?

Answer 4

area underneath it