Price Elasticity and Supply and Demand

Axia College Material
Appendix B

Price Elasticity and Supply & Demand

Fill in the matrix below and describe how changes in price or quantity of the goods and services affect either supply or demand and the equilibrium price. Use the graphs from your book and the Tomlinson video tutorials as a tool to help you answer questions about the changes in price and quantity

|Event                                 |Market affected by event                 |Shift in supply, demand, or both.       |Change in equilibrium                 |
|                                       |                                         |Explain your answer.                   |                                       |
|Frozen orange crops in California     |Orange juice                             |Supply (left)—Not as many available     |Price will increase and quantity will |
|                                       |                                         |oranges to offer consumers.             |decrease.                             |
|Hurricanes in the Gulf Coast           |Oil                                     |Supply Oil supply goes down so price   |Supply goes up so price goes down     |
|                                       |                                         |increases                               |                                       |
|Cost of cotton decreases               |Clothing                                 |Supply and Demand More cotton supply so|Price will increase and quantity will |
|                                       |                                         |price goes down on clothing             |decrease                               |
|Technology improves efficiency in     |Pasta                                   |Supply more pasta available to         |Less pasta available                   |
|pasta manufacturing                   |                                         |consumers                               |                                       |...