Name: Date: Period: Directions: Illustrate each of the following situations and write what happened to Price Equilibrium (Increase, Decrease or Indeterminate?) and Quantity Equilibrium (Increase, Decrease or Indeterminate?). As necessary, label S1, S2, D1, D2, Peql, Peq2, Qeql, Qeq2 and uses arrows to show shifts. 1) Supply: No Change 2) Supply: Decrease Demand: Increase Demand: No Change Price Price Quantity Quantity 3) Supply: Increase 4) Supply: No Change Demand: No Change Demand: Decrease Price Price Quantity Quantity 5) Supply: Increase Demand: Increase Price Quantity 7) Supply: Decrease Demand: Decrease Price Quantity Price Price 6) Supply: Increase Demand: Decrease Quantity 8) Supply: Decrease Demand: Increase Quantity Name: Date: Combining Supply and Demand Scenario: The following shows a demand and supply schedule listing CDs demanded and supplied (in the millions) per week at each price. e Graph each the following demand/supply schedules on one demand graph and then answer the questions below: Price Per | Quantity | Quantity | Shortage/ Compact | Demanded | Supplied | Surplus Disc (QS-QDb) $6 0 9 5 2 6 4 3 5 3 4 4 2 6 3 1 9 0 S oo 0T o . What is the equilibrium price? . What is the QD and QS at the equilibrium price? . What is the surplus at $6? . What is the shortage at $2 How does a surplus affect the price of a product? How does a shortage affect the price of a product? Changes in Demand Scenario: The following schedule shows a change in demand based on the price of a related product. The demand increased for CDs because the price of CD players dropped. 10 11 12 13 14 15 $6.00 5.00 Price Per | Quantity Quantity Quantity | Shortage Compact | Demanded | Demanded | Supplied Disc (CD (cD Surplus Players Players b 75) $50) AR AR S6 0 4 9 5 2 6 6 4 3 7 5 3 4 8 4 2 6 11 3 1 9 13 0 1 2 3 45 6 7 8 9 10 11 12 13 1415 a. b. How was the equilibrium point affected? c. What is the surplus at $6.00? d. What is the shortage at $2.00? e. Changes in Supply What happened to the original demand curve? How did this scenario benefit the supplier of CDs? Scenario: The following schedule shows a change in supply based on new technology and methods of producing CDs. The supply increased for CDs because the new technology allowed the supplier to produce CDs at a reduced rate. Price Per Quantity Quantity Quantity Shortage/ Compact | Demanded Supplied Supplied Surplus Disc (old (new (New QS technology) | technology) minus QD) S6 0 9 14 5 2 6 12 4 3 5 10 3 4 4 8 2 6 3 6 1 9 0 3 o 0 T w D Changes in Supply and Demand Scenario: The following schedule shows a change in supply and demand simultaneously for CDs. Price Per | Quantity Quantity Quantity Quantity Compact | Demanded | Demanded Supplied Supplied Disc (CD (CD (old (new Players Players technology) | technology) $75) $50) $6 0 4 14 6 12 a. How was the equilibrium point affected? b. What would happen to the price of CD's if an alternative product, such as the iPod, became popular and shifted the demand curve back to D1? (all things remaining the same) What would happen to the price of CD's if an input for creating cd increased and shifted the supply curve back to 2] 1 2 3 S1? (all things remaining the same) . What happened to the original supply curve? . How was the equilibrium point affected? . What is the surplus at $6.00? . Why is there no longer a shortage at $2.00? . How did this scenario benefit the consumers of CDs? 8 9 10 11 12 13 14 15