Let the diagram below represent the market for equities (stocks). Price is a representative price per share. Explain how the tendency of baby boomers to invest their savings by investing in equities (in preparation for retirement) might affect the equity market price and quantity. The supply of new offerings (Initial Public Offerings) also has increased over the same time period. The final results should show an increase in the equilibrium quantity exchanged accompanied by an increase in the equilibrium price. Restate observations in words (b).

a) GRAPHICAL ANALYSIS

Price Quantity