Help with these supply curve shifts?
So I know how to draw a supply and demand curve shift, but this question was a little odd and I'm not sure if I'm drawing it correctly. Part A asks: in 2005 the world's largest producer of surfboard foam stopped production. Demonstrate on the graph the effect of this change. So if production stops altogether, do I still just shift the supply curve to the left or is there a different way to draw that? Then part B asks: now assume that surfing becomes widely popular. demonstrate on the graph the effect of this change. I know the demand curve shifts out, but where is the new equilibrium? It doesn't say anything about that company making more goods so I don't know if I draw a new supply curve or use the original...or am I overthinking this? I'll take any help I can get!!!
What else can shift the demand or supply curve?
I just learnt this earlier today :O You should try to remember these two pnemonics - Things which will cause a change in supply - Productivity - if productivity increases, the supply curve will shift to the right. This is because it will be possible to make more goods without any rise in costs. Indirect taxes - An indirect tax (one which is payed by the consumer and not the producer) such as VAT will shift the supply curve to the left. Number of firms - If there are many firms the supply curve will shift to the right. Technology - As you get better technology productivity will increase, causing a shift to the right. Subsidies - Government subsidies mean some of your cost are paid for you, therefore you can afford to produce more and the supply curve shifts to the right. Weather - Extreme weather conditions will affect harvest etc, causing a left shift to the right in supply. This usually only affects agricultural commodities. Cost of production - If the cost of production goes up and price remains the same there is less incentive to supply products so supply shifts to left. Things which will cause a shift in the demand curve - Population - More people equals more demand. Shift to the right. Advertising- Better advertising will make people want ot buy your product. Demand increases. Shift to the right. Substitutes - If similar products are available more cheaply, demand for the original decreases. Left shift. Income - If average income falls the demand falls. Shift to the left. Fashion and trends - If i good is fashionable demand will rise. Shift ot the right. Interest rates - Demand for good which require loans or borrowing of money will drop as interest rates increase and borrowing becomes more expensive. Shift to the left. Complementary goods - Goods such as CD's and CD players are complementary goods; If you buy one the other is necessary or wanted too. If the price of one complementary good falls, the demand for the other is likely to rise. Shift to the right. Always remember that the only thing which can cause a shift ALONG (not across) a supply curve is price. Also, remember PASIFIC (or someties PLASTIC, google it) and PINTSWC!! :P Hope i helped :D
Supply / demand curve shift help!?
Think of SUVs as complementary goods to oil. If oil increased in price, obviously the price of gasoline would go up. With higher prices of gasoline, many consumers will look for alternatives to SUVs, which would decrease the demand for SUVs. This would be a leftward shift in the demand curve, resulting in lower prices, lower quantity. The supply curve would not shift; the quantity supplied would move to a point on the new demand curve. As for walnuts: The massive harvest would be an increase in supply, which would be a rightward shift in the supply curve. This is because there are more walnuts for a non-price factor of supply. At the same time, the announcement of the medical study would decrease the demand for walnuts (a non-price factor of demand), which would shift the demand curve leftward. With the supply curve shifting rightward and at the same time the demand curve shifting leftward, the new equilibrium would be lower price, but change in quantity would be undetermined; it would depend on which curve shifted more.
What causes a long-run aggregate supply curve to shift?
Increases in potential output or a rightward shift in the LRAS curve are usually due to the following:1. Increases in quantities of factors of productionFor example, an increase in the quantity of physical capital, or land (eg. discovery of oil reserves) - the economy is capable of producing more real GDP.2. Reductions in the natural rate of unemployment3. Increases in efficiencyThe economy is making better use of its scarce resources.4. Improvements in technologyThis means that factors of production can produce more output. Eg: improved machines and equipment due to technological advances5. Institutional changesRelated to efficiency. Eg: Degree of private ownership as opposed to public ownership of resources, the degree of competition in the economy, quality of government regulation of private sectors6. Improvements in the quality of factors of productionEg: greater level of education, skills or health. Based on these factors, government also develop supply-side policies targeting these issues in hopes of achieving long-term economic growth. (Of course, in short-run, there are certain issues that need to be addressed immediately as well, eg. controlling inflation through monetary policy).
The shift in demand and supply curves...econ help please!?
I am confused about the shifts in both demand and supply curves. Here are some questions that I need to clarify. Can anyone help me to make these questions below as clear as possible. Not only I need the explanation from the right answer but I also need to know why there are not the other answers. ( if you can) I really appreciate it. Thanks for putting the effort to help me. Thank you and thank you :-) 1. if the price of aluminum used to make bicycles increases, the price of a bicycle rises because of a A. Rightward shift of the demand curve for bicycles B. Rightward shift of the supply curve for bicycles C. Leftward shift of the demand curve for bicycles. D. Leftward shift of the supply curve for bicycles. ( right answer) 2. Assume that there is an improvement in production technologies and also an increase in the expected future price. Which of the following will happen? A. The equilibrium price will rise because the supply curve shifts rightward B. The equilibrium price will fall because the supply curve shifts leftward C. The technological improvement causes the supply curve to shift rightward while the increase in the expected future price causes the supply curve to shift leftward. The net effect is not know. ( right answer) D. The demand curve shifts rightward and the supply curve does not shift.
List 5 factors that will shift a supply curve ( supply and Demand)?
I just had an econ lesson on supply today and here are the notes I took. These shifters are called Determinants of Supply -Resource Prices: an increase in the price of a resource will decrease the supply and vice versa -Technology: an increase in technology will increase supply -Taxes and Subsidies: an increase in taxes (which are a cost to a Business) will decrease supply. A subside (taxes in reverse) will increase supply -Price of other goods: When the price of other "interchangeable" goods increases there will be a decrease in our goods. This due to a substitution in production. -Producer expectations: If suppliers are expecting prices to increase they may hold back some current product, thus decreasing supply -Number of sellers: an increase in the number of suppliers will increase supply and vice versa. I believe that's six factors actually so I guess our factors are different from yours...I hope this helps though! These are the notes i took in class straight from my notebooks.
Difference between a shift in supply curve and movement along supply curve?
movement along the supply curve is due to a change in either the quantity supplied, or the price. a shift of the supply curve comes from outside forces, such as a change in the consumers want/needs, economic changes (recession), or technological changes
Is it possible for a perfectly inelastic supply curve to shift to the right?
No. Perfectly inelastic supply implies that no matter what the demand or price the supply DOES NOT CHANGE. It is a vertical line on off of the x-axis, parallel to the y-axis. A good example of perfectly inelastic supply is Monet paintings. No matter what the price or demand, no more Monet paintings can be supplied. The P.I. supply curve could shift to the left if some of the paintings are destroyed, but obviously no more Monet paintings can be created - i.e. the supply curve cannot shift to the right. (PS "Max" is confused, he is referring to short-run and long-run supply curves for hotel rooms. The short-run supply curve MAY be perfectly inelastic at a given time, but the long-run supply curve is not. )