Question

People Window Help Topic: Unit 2: Class Discussion 797627?module item id-2729316 mando Fareaux Friday Dr. John, If the market is in equilibrium, then I believe changes in the market related to production costs or recalls could have an effect on supply. Also changes in consumer habits could change the demand as well. If demand reduces, it is likely that supply will be high shifting the curve to the left and sellers would have to find means to reduced their supply. Is this a reason to adjust/change the equilibrium? Armando Reply You have no incoming announcem Show All Announcements Q PARK CALENDARS t Information Academic Calendar All Add to My Calendar

Answer 1

In the given case, we see a fall / downward movement in the demand curve from D1 to D2. This fall is because of certain factors which impact demand like a change in consumer habits. The outcome of this decrease in demand whilst supply stays constant is that the Demand & Supply equilibrium falls from the price level P1 to P2, & quantity demanded & supplied falls from Q1 to Q2.

price P1 P2 D1 D2 Q2 Q1

price P1 P2 D1 D2 Q2 Q1