Chapter 6:section 2 changes in market equilibrium

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Presentation transcript:

Chapter 6:section 2 changes in market equilibrium By: Brooke Young

Changes in Price Market equilibrium occurs at the intersection of a demand curve and a supply curve. When the supply curve shifts, it changes the price and quantity of the equilibrium. When the supply curve shifts to the right or left it creates a whole new equilibrium. The equilibrium follows the intersection of the demand and supply curve.

Shifts in demand When trendy toys emerge, that’s when the market equilibrium shifts in a market demand curve. Toys are a great example of market equilibrium. Its shows how a unexpected increase in market demand will effect the equilibrium for a trendy toy. Market equilibrium is when the market price is established through competition between how much goods the buyers bought equals to the amount of goods by the seller.

Key terms Shortage- when the quantity demanded is greater then that quantity supplied. Search costs- the finical and opportunity costs consumers pay when looking for a good or service.

http://www.youtube.com/watch?v=4NrUpJ7hJII&feature=related

quiz What is market equilibrium? What is a shortage? What is a search cost? What happens when the supply curve shifts? What is an example of a equilibrium?