# 经济代写|微观经济学代写Microeconomics代考|ECON2516

## 经济代写|微观经济学代写Microeconomics代考|Shifts in the Supply Curve

Because the market supply curve is drawn holding other things constant, when one of these factors changes, the supply curve shifts. For example, suppose the price of sugar falls. Sugar is an input in the production of ice cream, so the lower price of sugar makes selling ice cream more profitable. This raises the supply of ice cream: At any given price, sellers are now willing to produce a larger quantity. As a result, the supply curve for ice cream shifts to the right.

Figure 7 illustrates shifts in supply. Any change that raises quantity supplied at every price, such as a fall in the price of sugar, shifts the supply curve to the right and is called an increase in supply. Any change that reduces the quantity supplied at every price shifts the supply curve to the left and is called a decrease in supply.
There are many variables that can shift the supply curve. Let’s consider the most important ones.

Input Prices To produce their output of ice cream, sellers use various inputs: cream, sugar, flavoring, ice-cream machines, the buildings in which the ice cream is made, and the labor of workers who mix the ingredients and operate the machines. When the price of one or more of these inputs rises, producing ice cream becomes less profitable, and firms supply less ice cream. If input prices rise substantially, a firm might shut down and supply no ice cream at all. Thus, the supply of a good is negatively related to the prices of the inputs used to make the good.

## 经济代写|微观经济学代写Microeconomics代考|Supply and Demand Together

The actions of buyers and sellers naturally move markets toward the equilibrium of supply and demand. To see why, consider what happens when the market price is not equal to the equilibrium price.

Suppose first that the market price is above the equilibrium price, as in panel
(a) of Figure 9. At a price of $\$ 5$per cone, the quantity of the good supplied (10 cones) exceeds the quantity demanded ( 4 cones). There is a surplus of the good: Producers are unable to sell all they want at the going price. A surplus is sometimes called a situation of excess supply. When there is a surplus in the ice-cream market, sellers of ice cream find their freezers increasingly full of ice cream they would like to sell but cannot. They respond to the surplus by cutting their prices. Falling prices, in turn, increase the quantity demanded and decrease the quantity supplied. These changes represent movements along the supply and demand curves, not shifts in the curves. Prices continue to fall until the market reaches the equilibrium. Suppose now that the market price is below the equilibrium price, as in panel (b) of Figure 9 . In this case, the price is$\$3$ per cone, and the quantity of the good demanded exceeds the quantity supplied. There is a shortage of the good: Consumers are unable to buy all they want at the going price. A shortage is sometimes called a situation of excess demand. When a shortage occurs in the ice-cream market, buyers have to wait in long lines for a chance to buy one of the few cones available. With too many buyers chasing too few goods, sellers can respond to the shortage by raising their prices without losing sales. These price increases cause the quantity demanded to fall and the quantity supplied to rise. Once again, these changes represent movements along the supply and demand curves, and they move the market toward the equilibrium.

Thus, regardless of whether the price starts off too high or too low, the activities of the many buyers and sellers automatically push the market price toward the equilibrium price. Once the market reaches its equilibrium, all buyers and sellers are satisfied, and there is no upward or downward pressure on the price. How quickly equilibrium is reached varies from market to market depending on how quickly prices adjust. In most free markets, surpluses and shortages are only temporary because prices eventually move toward their equilibrium levels. Indeed, this phenomenon is so pervasive that it is called the law of supply and demand: The price of any good adjusts to bring the quantity supplied and quantity demanded of that good into balance.

# 微观经济学代考

## 经济代写|微观经济学代写Microeconomics代考|Supply and Demand Together

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