Draw a demand curve or supply curve and label it D1 or S1. On the graph, illustrate an increase in demand or supply and a decrease in demand or supply, and label the curve D2 or S2 and D3 or S3, respectively. Starting on a demand curve or supply curve D1 or S1, explain the shift that would result from each of the following events:
Assume books and magazines are substitutes.
What will happen in the book market if the price of magazines decreases?
What will happen in the lemonade market if a new technology is introduced in the production of lemonade?
What will happen in the market for cats if the income of the population who buy cats increase?
What will happen in the market for cars if the price of steel to make cars increases?