(a) Show the equilibrium point, the equilibrium price and quantity. (b) Show using your graph and explain in words, why a price of $14 in the graph below would fall (given a free market process). Do the same for a price of $7, explaining why the market price would rise. Be sure to show the surplus or shortage that would occur at any price other than $11. (c) Name one change that would cause demand to increase (D curve to shift out), explain how the market would respond, causing a new equilibrium P and Q. Illustrate this on your graph. Do the same for a change that would cause the supply to fall.

Price S 514 511 D $7 11 13 Quantity