Effects of a Change in Demand or Supply on the Equilibrium Position

    0
    55

    Effects of a Change in Demand or Supply on the Equilibrium Position

    • Within a market, the position of equilibrium could change due to:
      • A change in demand, whereby the demand curve shifts to the right or left
      • A change in supply, whereby the supply curve shifts to the right or left
      • A more or less simultaneous change in demand and supply

     

    • When looking at these effects, it is important to be mindful of the time scale
    • Markets, especially on the supply side, cannot adjust quickly
    • On the demand side, however, epidemics can have a rapid effect on the equilibrium price and quantity
    • The usual assumption made is that all other market factors remain unchanged.

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here