2. Price per lb. Quantity (lbs) 0  D S $5.50 800 Salmon Market At a price of $5.50, consumers can buy all they wish to buy. Sellers may sell all they wish at that price as well.

3. Price per lb. Quantity (lbs) 0 11 D1D1 S $5.50 800 Salmon Market 22 D2D2 $6.50 920 Demand could shift right due to 7Increase in the price of red snapper, orange roughy, etc. 7Increase in consumer incomes. 7 Change of preferences Effect of a change in demand

4. Price per lb. Quantity (lbs) 0 11 D1D1 S $5.50 800 Salmon Market 22 D2D2 $6.50 920 Demand could shift left due to 7Decrease in the price of red snapper, orange roughy, etc. 7Decrease in consumer incomes. 7 Change of preferences Effect of a change in demand, part 2

5. Price per lb. Quantity (lbs) 0 11 D1D1 S1S1 $5.50 800 Salmon Market 22 $4.50 1000 Supply could shift right due to 7Increase in the number of (fisherman) sellers. 7Decrease in input prices (fuel, bait, wages, transportation, etc.) 7 Better fishing S2S2 Effect of a change in supply

6. Price per lb. Quantity (lbs) 0 11 D1D1 S1S1 $5.50 800 Salmon Market 22 $6.25 670 Supply could shift left due to 7Decrease in the number of (fisherman) sellers. 7Increase in input prices (fuel, bait, wages, transportation, etc.) 7Poor fishing S2S2 Effect of a change in supply, part 2

7. Price per bushel Quantity (bushels) 0 22 11 P1P1 q1q1 q2q2 S1S1 S2S2 In this case, price remains unchanged D2D2 D1D1

8. Price per bushel Quantity (bushels) 0 22 11 P1P1 q1q1 q2q2 S1S1 S2S2 Now both price and quantity change D2D2 D1D1 P2P2 Effect of a change in demand and supply, part 2

9. Price per bushel Quantity (bushels) 0 00 11 P1P1 q1q1 q0q0 S1S1 S0S0 Since the shift backward of D is of the same magnitude as the shift of S, P is unchanged. D0D0 D1D1

10. 0 Quantity Price $2 $3 $4 486684 Supply DemandShortage Surplus At a price of $4, Q S > Q D by 36 videos. When the price is $2, Q D > S D by 36 videos Shortages and surpluses

11. These are government-imposed restrictions on market price Examples: ï Department of Agriculture loan rates for rice, corn, peanuts, wheat, sorghum, etc. ï The minimum wage. ï Rent controls in NYC Effect of Price Floors and Ceilings

12. P/BU bushels 0 #2 Hard KC Wheat S D 550700850 $2.52 $3.20 Surplus A price floor of $3.20 per bushel will produce a surplus of 300 bushels. But what if the floor were set at $2.35?

13. Monthly Rent Rental Units 0 S D 4,0005,7007,000 $900 $1,120 Shortage If the Rent Control Board sets a ceiling of $900 per month, 3,000 apartment- seekers won’t be able to find one. The rental housing market in New York City