Equilibrium Part 1

If consumers believe that an item will not be available in the future, then demand will shift _____ and the equilibrium quantity will _____.

right; rise

If a market is NOT at equlilbrium

The price will change and in response market participants will move along the existing supply and demand curves until the market reaches equilibrium

If the producers of cotton shirts face higher cotton prices, which scenario is likely to occur?

The supply of cotton shirts decreases, the equilibrium price of cotton shirts rises, and the equilibrium quantity falls.

In the market for cable television, fewer people are subscribing to cable while the cost of providing cable television has increased. As a result, we can expect a(n):

Unknown change in the equilibrium price but a decrease in the equilibrium quantity of cable television

A surplus exists

When quantity supplied exceeds the quantity demanded

When the supply curve shifts out (to the right) and the demand curve shifts in (to the left), the equilibrium quantity will:

be indeterminate.

Suppose there is unseasonable summer weather in a resort town. We can expect demand to shift _____ and the equilibrium price for hotels to _____.

left; fall

When production technology improves, supply increases and the equilibrium:

quantity rises and the equilibrium price falls.