Question:
The market for shoes in 1997. Between 1997 and 1998, the equilibrium price of shoes remained constant, but the equilibrium quantity of shoes decreased. From this, you can conclude that between 1997 and 1998, the supply of shoes _______ and the demand for shoes ______________. Would this affect the supply and demand curve?
My Answer:
The first blank is decrease.
The second blank is increase.
Both the supply and demand curves would be affected. The supply curve would shift to the left and the demand curve would shift to the right. ---- Am I right or am I off?
Thank you for using the Jiskha Homework Help Forum. It is the "supply and demand" in effect here.
The supply decreases, the price goes up because even if the demand does not change, it will be harder to fill all the requests.
The supply increases (floods the market), the price drops because no one needs all the shoes available.
Would it affect the curve? Definitely.
Sra
I'm lost...I don't understand...
Your answer is partially correct. Between 1997 and 1998, the decrease in equilibrium quantity of shoes indicates that the supply of shoes decreased, but we cannot conclude whether the demand for shoes increased or decreased based on this information alone. Therefore, the correct answer for the second blank is that the demand for shoes could have either increased or decreased.
As for the effect on the supply and demand curves, you are correct. Since the equilibrium quantity of shoes decreased, it suggests a decrease in supply. This would result in a leftward shift of the supply curve. If the demand for shoes also increased, it would result in an increase in demand, leading to a rightward shift of the demand curve.
However, if the demand for shoes decreased, then the demand curve would shift to the left instead. Therefore, without knowing the specific changes in demand, we cannot definitively determine the full impact on the supply and demand curves.