Use internet or printed publications to identify example of

Use internet or printed publications to identify example of Increase Decrease in Demand.

Also address the following:

the initial equilibrium

identify the shock Decrease in Demand

the resulting equilibrium

compare resulting equilibrium prices and quantities to the previously existing ones

Solution

a. Identify example of Increase Decrease in Demand.

Shifts in supply and demand, an example.

2. Initial equilibrium is the old point on the right of the diagram.

3. Shock Decrease in Demand:

The non-linearity of AS reflects variation in the elasticity of aggregate supply.

4. Resulting Equilibrium:

5. Compare resulting equilibrium prices and quantities to the previously existing ones:

When compared to the previous equilibrium. prices have soared and the demand has also increased considerably as the demand curve has moved upwards to the right.

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