1. Supply and Demand: Changes in Equilibrium

2. Change in Market Equilibrium: Change in Demand Price of caviar (per pound) Quantity of caviar (millions of pounds) 70 $30 $15 4020 90 $25 $20 $5 $10 $35 8060 5030 10 $40 $45 95 S--What if the price of escargot (another snooty appetizer) skyrocketed? D2D2 D1D1 E1E1 P1P1 P2P2 E2E2 Q1Q1 Q2Q2 Demand for caviar increases… …which leads to movement along the supply curve to: 1)higher equilibrium price and 2)higher equilibrium quantity.

3. Change in Market Equilibrium: Change in Supply Price of caviar (per pound) Quantity of caviar (millions of pounds) 70 $30 $15 4020 90 $25 $20 $5 $10 $35 8060 5030 10 $40 $45 95 S2S2 S1S1 E1E1 P1P1 P2P2 E2E2 Q1Q1 Q2Q2 Supply of caviar decreases… …which leads to movement along the demand curve to: 1)higher equilibrium price and 2)lower equilibrium quantity. --What if sturgeon (the fish whose eggs make escargot) populations declined? D