Difference Between A Movement Along The Supply And A Shift Of The Entire Supply Curve

Any change that lowers the quantity that buyers wish to purchase at any given price shifts the demand curve to the left.

Refer to Figure 18-4. The shift of the labor demand curve from D1 to D2 could possibly be explained by

The diagram to the left shows how a trade union can force a rise in wages, but it could lead to a cut in the number of jobs. If the union secures the rise in wages from W1 to W2, the trade union mark up, then this leads to an increase in wages. However it also intersects the demand curve at a much higher point

Economic factors – which include interest rates, economic growth, exchange rates, inflation and taxation changes (Nieman, G; 1998). The change the economy can have a major impact on the behaviour of the business. For example: inflation may cause a higher wage demand from employees (Herrigton, Kew & Kew; 2009).

i) With regard to elastic demand, the change in quantity demanded due to the price change would increase or be larger.

Apple juice and orange juice are substitutes for consumers, so the fall in the price of apple juice decreases the demand for orange juice. The demand curve for orange juice shifts leftward. The increase in the wage rate paid to orange grove workers raises the cost of producing orange juice. The supply of orange juice decreases and the supply curve of orange juice shifts leftward. The net effect of these events decreases the equilibrium quantity but has an undetermined effect on equilibrium price. If supply decreases by more than the demand, the shift in the

Formulate a reason why the elasticity of demand is an important consideration when analyzing the impact of a shift in supply and why the elasticity of supply is an important consideration when analyzing the impact of a shift in demand. Include at least one (1) example in each scenario.

cause of any shift or movement along AE, AD, SRAS, and/or LRAS. In each case, assume that the economy

How do the concepts of macroeconomics help you understand the factors that affect shifts in supply and demand on the equilibrium price and quantity?

This causes the price and the quantity move in opposite directions in a supply curve shift. Also, if the quantity supplied decreases at any given price the opposite will happen.

When there is a change of one of the factors of supply- like changes in the prices of production inputs like labour or capital; a change in production technology and its associated productivity change; or the amount of competition in a specific product market- there is a corresponding change in the supply curve. For example, if worker productivity improves due to some human capital or technology investment, then the costs of production decrease. This exerts a positive effect on the supply curve shifting it right, where the new market equilibrium is at a higher quantity and a lower price, holding everything else constant. There can also be a negative shift that moves the supply curve to the left, with the resulting market clearing price being higher and quantity lower, ceteris

Three reasons the aggregate-demand curve slopes downward are the wealth effect, the interest-rate effect, and the exchange rate effect. The wealth effect explains that when the price level decreases, each consumer is wealthier because the real value of his or her dollar has increased. Wealthier consumers spend more, increasing the demand for consumption goods and services. Conversely, if the price level rises, the real value of the dollar will decrease, effectively making consumers poorer. Poorer consumers will spend less on consumption, decreasing the demand for goods and services.

Due to an increase in AS. This increase in AS could be short term or long term due to changing regulations or a sudden change in the price of an input, among other reasons. The increase in AS even if AD remains constant will push down the prices and the unemployment in the economy.

Elasticity : rising or falling price lead changes in quantity of demand, and the quantity of supply and this so-called elasticity

Figure 2 demonstrate how any change in one of the other determinants causes demand to rise or to fall by shifting the whole curve to the right or the left. Other factors that determinates of demand