8. Shifts in supply or demand I

The following graph shows the market for hot dogs in New York City, where there are over 1,000 hot dog stands at any given moment. Suppose the municipal government sharply increases local taxes, making it significantly more expensive to reside in New York City. Many residents decide to leave the city altogether for areas with lower local taxes.

Show the effect of this change on the market for hot dogs by shifting one or both of the curves on the following graph, holding all else constant.