管理经济学（第14版） 课件 第2章　需求、供给和市场均衡

Chapter02Demand,Supply,andMarketEquilibriumMANAGERIALECONOMICSFoundationsofBusinessAnalysisandStrategyFourteenthEditionCHRISTOPHERR.THOMAS©McGrawHillLLC.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGrawHillLLC.LearningObjectives2.1Identifydemandfunctionsanddistinguishbetweenachangeindemandandachangeinquantitydemanded.2.2Identifysupplyfunctionsanddistinguishbetweenachangeinsupplyandachangeinquantitysupplied.2.3Explainwhymarketequilibriumoccursatthepriceforwhichquantitydemandedequalsquantitysupplied.2.4Measuregainsfrommarketexchangeusingconsumersurplus,producersurplus,andsocialsurplus.2.5Predicttheimpactonequilibriumpriceandquantityofshiftsindemandorsupply.2.6Examinetheimpactofgovernment-imposedpriceceilingsandpricefloors.2DemandQuantitydemanded(Qd)Amountofagoodorserviceconsumersarewillingandabletopurchaseduringagivenperiodoftime.3GeneralDemandFunctionSixvariablesthatinfluenceQdPriceofgoodorservice(P).Incomesofconsumers(M).Pricesofrelatedgoodsandservices(PR).Tastepatternsofconsumers(T).Expectedfuturepriceofproduct(PE).Numberofconsumersinmarket(N).Generaldemandfunction:

Qd=f(P,M,PR,T,PE,N)4SlopeParameters—DemandQd=a+bP+cM+dPR+eT+fPE+gNb,c,d,e,f,andgareslopeparameters.MeasureeffectonQd

ofchangingoneofthevariableswhileholdingtheothersconstant.SignofparametershowshowvariableisrelatedtoQd.Positivesignindicatesdirectrelationship.Negativesignindicatesinverserelationship.5NormalVersusInferiorGoodsNormalgoodAgoodorserviceforwhichanincrease(decrease)inincomecausesconsumerstodemandmore(less)ofthegood,holdingallothervariablesinthegeneraldemandfunctionconstant.InferiorgoodAgoodorserviceforwhichanincrease(decrease)inincomecausesconsumerstodemandless(more)ofthegood,allotherfactorsheldconstant.6SubstituteVersusComplementGoodsSubstitutesTwogoodsaresubstitutesifanincrease(decrease)inthepriceofonegoodcausesconsumerstodemandmore(less)oftheothergood,holdingallotherfactorsconstant.ComplementsTwogoodsarecomplementsifanincrease(decrease)inthepriceofonegoodcausesconsumerstodemandless(more)oftheothergood,allotherthingsheldconstant.7Table2.1:SummaryoftheGeneral(Linear)DemandFunctionVariableRelationtoQdSignofSlopeParameterPInverseb=∆Qd∕∆PisnegativeMDirectfornormalgoodsInverseforinferiorgoodsc=∆Qd∕∆Mispositivec=∆Qd∕∆MisnegativePRDirectforsubstitutesInverseforcomplementsd=∆Qd∕∆PRispositived=∆Qd∕∆PRisnegative𝒯Directe=∆Qd∕∆𝒯ispositivePEDirectf=∆Qd∕∆PEispositiveNDirectg=∆Qd∕∆Nispositive8DirectDemandFunctionThedirectdemandfunction,orsimplydemand,showshowquantitydemanded,Qd,isrelatedtoproductprice,P,whenallothervariablesareheldconstant:

Qd=f(P)Ademandscheduleisatableshowingalistofpossibleproductpricesandthecorrespondingquantitiesdemanded.9Table2.2:DemandSchedulefortheDemandFunctionD0:Qd=1,400−10PPriceQuantityDemanded$14001202001004008060060800401,000201,20010DemandCurveThedemandcurveisagraphshowingtherelationbetweenquantitydemandedandpricewhenallothervariablesinfluencingquantitydemandedareheldconstant.Apointonadirectdemandcurveshowseither:MaximumamountofagoodthatwillbepurchasedforagivenpriceMaximumpriceconsumerswillpayforaspecificamountofthegood(demandprice)11LawofDemandLawofDemandQdincreaseswhenPfalls,allelseconstant.Qd

decreaseswhenPrises,allelseconstant.

Qd/Pmustbenegative.12Figure2.1:ADemandCurve,Qd=1,400−10PAccessthetextalternativeforslideimages.13InverseDemandFunctionTraditionally,price(P)isplottedontheverticalaxisandquantitydemanded(Qd)isplottedonthehorizontalaxis.Theequationplottedistheinversedemandfunction,P=f(Qd).14GraphingDemandCurvesChangeinquantitydemandedOccursonlywhenpricechanges.Movementalongdemandcurve.ChangeindemandOccurswhenoneoftheothervariables,ordeterminantsofdemand,changes.Demandcurveshiftsrightwardforanincreaseorleftwardforadecrease.15Table2.3:ThreeDemandSchedules(1)(2)(3)(4)PriceD0:Qd=1,400–10PQuantityDemanded(M=$60,000)D1:Qd=1,600–10PQuantityDemanded(M=$64,000)D2:Qd=1,000–10PQuantityDemanded(M=$52,000)$140020001202004000100400600080600800200608001,000400401,0001,200600201,2001,40080016Figure2.2:ShiftsinDemandAccessthetextalternativeforslideimages.17Table2.4:SummaryofDemandShiftsDeterminantsofDemandDemandIncreasesaDemandDecreasesbSignofSlopeParameterc1.Income(M)NormalgoodMrisesMfallsc>0InferiorgoodMfallsMrisesc<02.Priceofrelatedgood(PR)SubstitutegoodPRrisesPRfallsd>0ComplementgoodPRfallsPRrisesd<03.Consumertastes(T)TrisesTfallse>04.Expectedprice(PE)PErisesPEfallsf>05.Numberofconsumers(N)NrisesNfallsg>0aDemandincreaseswhenthedemandcurveshiftsrightward.bDemanddecreaseswhenthedemandcurveshiftsleftward.cThiscolumngivesthesignofthecorrespondingslopeparameterinthegeneraldemandfunction.18SupplyQuantitysupplied(Qs)Amountofagoodorserviceofferedforsaleduringagivenperiodoftime.19GeneralSupplyFunctionSixvariablesthatinfluenceQs:Priceofgoodorservice(P).Inputprices(PI).Pricesofgoodsrelatedinproduction(Pr).Technologicaladvances(T).Expectedfuturepriceofproduct(Pe).Numberoffirmsproducingproduct(F).Generalsupplyfunction:Qs=f(P,PI,Pr,T,Pe,F)20SlopeParameters—SupplyQs=h+kP+lPI+mPr+nT+rPe+sFk,l,m,n,r,and

s

areslopeparameters.Measureeffecton

Qs

ofchangingoneofthevariableswhileholdingtheothersconstant.Signofparametershowshowvariableisrelatedto

Qs.Positivesignindicatesdirectrelationship.Negativesignindicatesinverserelationship.21SubstitutesVersusComplementsinProductionSubstitutesinproductionGoodsforwhichanincreaseinthepriceofonegoodrelativetothepriceofanothergoodcausesproducerstoincreaseproductionofthenowhigher-pricedgoodanddecreaseproductionoftheothergood.ComplementsinproductionGoodsforwhichanincreaseinthepriceofonegood,relativetothepriceofanothergood,causesproducerstoincreaseproductionofbothgoods.22TechnologyThestateofknowledgeconcerningthecombinationofresourcestoproducegoodsandservices.23Table2.5:SummaryoftheGeneral(Linear)SupplyFunctionVariableRelationtoQsSignofSlopeParameterPDirectk=∆Qs∕∆PispositivePIInverseI=∆Qs∕∆PIisnegativePrInverseforsubstitutesDirectforcomplementsm=∆Qs∕∆Prisnegativem=∆Qs∕∆PrispositiveTDirectn=∆Qs∕∆TispositivePeInverser=∆Qs∕∆PeisnegativeFDirects=∆Qs∕∆Fispositive24DirectSupplyFunctionThe

directsupplyfunction,orsimplysupply,showshowquantitysupplied,Qs,

isrelatedtoproductprice,P,whenallothervariablesareheldconstant:

Qs=f(P)Thesupplyscheduleisatableshowingalistofpossibleproductpricesandthecorrespondingquantitiessupplied.25Table2.6:TheSupplySchedulefortheSupplyFunctionS0:Qs=−400+20PPriceQuantitySupplied$1402,4001202,0001001,600801,200608004040020026SupplyCurveAsupplycurveisagraphshowingtherelationbetweenquantitysuppliedandprice,whenallothervariablesinfluencingquantitysuppliedareheldconstant.Apointonasupplycurveshowseither:MaximumamountofagoodthatwillbeofferedforsaleatagivenpriceMinimumpricenecessarytoinduceproducerstovoluntarilyofferagivenquantityforsale(supplyprice)27Figure2.3:ASupplyCurve,Qs=−400+20PAccessthetextalternativeforslideimages.28InverseSupplyFunctionTraditionally,price(P)isplottedontheverticalaxis,andquantitysupplied(Qs)isplottedonthehorizontalaxis.Theequationplottedistheinversesupplyfunction,

P=f(Qs).29GraphingSupplyCurvesChangeinquantitysuppliedOccursonlywhenpricechanges.Movementalongsupplycurve.ChangeinsupplyOccurswhenoneoftheothervariables,ordeterminantsofsupply,changes.Supplycurveshiftsrightwardforanincreaseorleftwardforadecrease.30Table2.7:ThreeSupplySchedules(1)(2)(3)(4)PriceS0:Qs=−400+20PQuantitySupplied(PI=$100,F=25)S1:Qs=20PQuantitySupplied(PI=$60,F=25)S2:Qs=−700+20PQuantitySupplied(PI=$100,F=10)$1402,4002,8002,1001202,0002,4001,7001001,6002,0001,300801,2001,600900608001,20050040400800100200400031Figure2.4:ShiftsinSupplyAccessthetextalternativeforslideimages.32Table2.8:SummaryofSupplyShiftsDeterminantsofsupplySupplyincreasesaSupplydecreasesbSignofslopeparameterc1.Priceofinputs(PI)PIfallsPIrisesl<02.Priceofgoodsrelatedinproduction(Pr)SubstitutegoodPrfallsPrrisesm<0ComplementgoodPrfallsPrfallsm>03.Stateoftechnology(T)TrisesTfallsn>04.Expectedprice(Pe)PefallsPerisesr<05.Numberoffirmsorproductivecapacityinindustry(F)FrisesFfallss>0aSupplyincreaseswhenthesupplycurveshiftsrightward.bSupplydecreaseswhenthesupplycurveshiftsleftward.cThiscolumngivesthesignofthecorrespondingslopeparameterinthegeneralsupplyfunction.33MarketEquilibriumEquilibriumpriceandquantityaredeterminedbytheintersectionofdemandandsupplycurves.Atthepointofintersection,Qd=Qs.Consumerscanpurchasealltheywishandproducerscansellalltheywishatthemarket-clearingprice,orequilibriumprice.34Table2.9:MarketEquilibrium(1)(2)(3)(4)PriceS0QuantitySuppliedQs=−400+20PD0QuantityDemandedQd=1,400−10PExcessSupply(+)orExcessDemand(–)Qs−Qd$1402,4000+2,4001202,000200+1,8001001,600400+1,200801,200600+600608008000404001200-1,20035Figure2.5:MarketEquilibriumAccessthetextalternativeforslideimages.36ExcessSupplyandExcessDemandExcesssupply(surplus)Existswhenquantitysuppliedexceedsquantitydemanded.Excessdemand(shortage)Existswhenquantitydemandedexceedsquantitysupplied.37ValueofMarketExchangeTypically,consumersvaluethegoodstheypurchasebyanamountthatexceedsthepurchasepriceofthegoods.Economicvalue:Maximumamountanybuyerinthemarketiswillingtopayfortheunit,whichismeasuredbythedemandpricefortheunitofthegood.38MeasuringtheValueofMarketExchangeConsumersurplusDifferencebetweentheeconomicvalueofagood(itsdemandprice)andthemarketpricetheconsumermustpay.ProducersurplusForeachunitsupplied,differencebetweenthemarketpriceandtheminimumpriceproducerswouldaccepttosupplytheunit(itssupplyprice).SocialsurplusSumofconsumerandproducersurplus.Areabelowdemandandabovesupplyovertherelevantrangeofoutput.39Figure2.6:MeasuringtheValueofMarketExchangeAccessthetextalternativeforslideimages.40ChangesinMarketEquilibriumQualitativeforecastPredictsonlythedirectioninwhichaneconomicvariablewillmove.QuantitativeforecastPredictsboththedirectionandthemagnitudeofthechangeinaneconomicvariable.41Figure2.7:DemandShifts(SupplyConstant)Accessthetextalternativeforslideimages.42Figure2.8:SupplyShifts(DemandConstant)Accessthetextalternativeforslideimages.43SimultaneousShiftsWhendemandandsupplyshiftsimultaneously:Wecanpredicteitherthedirectioninwhichpricechangesorthedirectioninwhichquantitychanges,butnotboth.Thechangeinequilibriumpriceorquantityissaidtobeindeterminatewhenthedirectionofchangedependsontherelativemagnitudesbywhichdemandandsupplyshift.44Figure2.9:ShiftsinBothDemandandSupply,DemandandSupplyBothIncreaseAccessthetextalternativeforslideimages.45Figure2.10:SummaryofSimultaneousShiftsinDemandandSupply,theFourPossibleCasesAccessthetextalternativeforslideimages.46Figure2.11:DemandandSupplyforAirTravelAccessthetextalternativeforslideimages.47CeilingandFloorPricesCeilingpriceMaximumpricethegovernmentpermitssellerstochargeforagood.Whentheceilingpriceisbelowequilibrium,ashortageoccurs.FloorpriceMinimumpricethegovernmentpermitssellerstochargeforagood.Whenthefloorpriceisaboveequilibrium,asurplusoccurs.48Figure2.12:CeilingandFloorPricesAccessthetextalternativeforslideimages.49Summary1Sixvariablesinfluencedemand:good’sprice,income,pricesofrelatedgoods,consumers’tastes,expectedfutureprice,andnumberofconsumers.Lawofdemandstatesthatquantitydemandedincreases(decreases)whenpricefalls(rises),allelseconstant.Sixvariablesinfluencesupply:good’sprice,inputprices,pricesofgoodsrelatedinproduction,producers’expectationoffutureprice,numberoffirms.Equilibriumpriceandquantityaredeterminedbyintersectionofsupplyanddemandcurves.50Summary2Consumersurplusarisesbecausetheequilibriumpriceconsumerspayislessthanthevaluetheyplaceontheunitstheypurchase.Producersurplusarisesbecauseequilibriumpriceisgreaterthantheminimumpriceproducerswouldbewillingtoaccepttoproduce.Socialsurplus:sumofconsumersurplusandproducersurplus.Whenbothsupplyanddemandshiftsimultaneously,onecanpredicteitherthedirectionofchangeinpriceorthedirectionofchangeinquantity,butnotboth.Aceilingprice(belowequilibrium)resultsinashortage;afloorprice(aboveequilibrium)resultsinasurplus.51EndofMainContent©McGrawHillLLC.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGrawHillLLC.AccessibilityContent:TextAlternativesforImages53Figure2.1:ADemandCurve,Qd=1,400−10P

-TextAlternativeReturntoparent-slidecontainingimages.Theverticaly-axisislabeledpriceindollarsrangingfrom0to160inincrementsof20units.Thehorizontalx-axisislabeledquantitydemanded(Qsubscriptd)rangingfrom0to1,600inincrementsof200units.Threelinesareplottedonthegraphlabeledfromthelefttotherightasfollows:Dsubscript2,Dnaught,andDsubscript1.LineDsubscript2startsat(195,82),extendsdownwardtoreach(500,50)andendsat(1,000,0).LineDnaughtstartsat(195,121),extendsdownwardtoreach(600,80),andendsat(1,400,0).LineDsubscript1startsat(195,143),extendsdownwardtoreach(800,82),andendsat(1,600,0).Anarrowsegmentlabeled'Demanddecrease'isdrawnwhoseendpointsareat(800,60)and(400,60).Anotherarrowlabeled'Demandincrease'isdrawnwhoseendpointsareat(600,80)and(800,80).Notethattheabove-mentionedcoordinatevaluesareapproximate.Returntoparent-slidecontainingimages.54Figure2.2:ShiftsinDemand-TextAlternativeReturntoparent-slidecontainingimages.Theverticaly-axisislabeledpriceindollarsrangingfrom0to160inincrementsof20units.Thehorizontalx-axisislabeledquantitydemanded(Qsubscriptd)rangingfrom0to1,600inincrementsof200units.Threelinesareplottedonthegraphlabeledfromthelefttotherightasfollows:Dsubscript2,Dnaught,andDsubscript1.LineDsubscript2startsat(195,82),extendsdownwardtoreach(500,50)andendsat(1,000,0).LineDnaughtstartsat(195,121),extendsdownwardtoreach(600,80),andendsat(1,400,0).LineDsubscript1startsat(195,143),extendsdownwardtoreach(800,82),andendsat(1,600,0).Anarrowsegmentlabeled'Demanddecrease'isdrawnwhoseendpointsareat(800,60)and(400,60).Anotherarrowlabeled'Demandincrease'isdrawnwhoseendpointsareat(600,80)and(800,80).Notethattheabove-mentionedcoordinatevaluesareapproximate.

Returntoparent-slidecontainingimages.55Figure2.3:ASupplyCurve,Qs=−400+20P-TextAlternativeReturntoparent-slidecontainingimages.Theverticaly-axisislabeledpriceindollarsrangingfrom0to140inincrementsof20units.Thehorizontalx-axisislabeledquantitysupplied(Qsubscripts)rangingfrom0to2,400inincrementsof400units.AlinewithapositiveslopelabeledSnaughtstartsat(0,20),andextendsupwardtoendat(2,400,140).Thepointsonthelinearemarkedasfollows:R(400,40),S(800,60),(1,200,80),(1,600,100),and(2,400,140).Notethattheabove-mentionedcoordinatevaluesareapproximate.

Returntoparent-slidecontainingimages.56Figure2.4:ShiftsinSupply-TextAlternativeReturntoparent-slidecontainingimages.Theverticaly-axisislabeledpriceindollarsrangingfrom0to120inincrementsof20units.Thehorizontalx-axisislabeledquantitysupplied(Qsubscripts)rangingfrom0to1,200inincrementsof200units.Threediagonallinesareplottedonthegraph,labeledfromthetoptothebottomasfollows:Ssubscript2,Snaught,andSsubscript1.LineSsubscript2startsat(0,38),extendsupwardtoreach(600,650)andendsat(1,300,100).LineSnaughtstartsat(0,20),extendsupwardtoreach(600,52),andendsat(1,400,80).LineSsubscript1startsat(0,0),extendsupwardtoreach(600,30)andendsat(1,400,60).Anarrowlabeled'Supplyincrease'isdrawnwhoseendpointsareat(400,40)and(800,40).Anotherarrowlabeled'Supplydecrease'isdrawnwhoseendpointsareat(900,80)and(1,200,80).Notethattheabove-mentionedcoordinatevaluesareapproximate.

Returntoparent-slidecontainingimages.57Figure2.5:MarketEquilibrium-TextAlternativeReturntoparent-slidecontainingimages.Theverticaly-axisislabeledpriceindollarsrangingfrom0to140inincrementsof20units.Thehorizontalx-axisislabeledquantity(QsubscriptdandQsubscripts)rangingfrom0to1,200inincrementsof200units.Anincreasingdiagonallineandadecreasingdiagonalline,labeledSnaughtandDnaughtrespectively,areplottedthatintersecteachotheratapointlabeledA.LineSnaughtstartsat(0,20),passesalong(400,40),movesrighttopointAat(800,60),andendsat(1,200,80).LineDnaughtstartsat(0,140),passesalong(600,80),goestopointAat(800,60),andendsat(1,000,40).Notethattheabove-mentionedcoordinatevaluesareactualvalues.

Returntoparent-slidecontainingimages.58Figure2.6:MeasuringtheValueofMarketExchange-TextAlternativeReturntoparent-slidecontainingimages.Theverticaly-axisislabeledpriceindollarsrangingfrom0to140inincrementsof20units.Thehorizontalx-axisislabeledquantity(QsubscriptdandQsubscriptS)rangingfrom0to1,000inincrementsof200units.Anincreasingdiagonallineandadecreasingdiagonalline,labeledSnaughtandDnaughtrespectively,aredrawnthatintersecteachotheratapointlabeledA.LineDnaughtstartsatpointuat(0,140),passesalongpointrat(400,100),goesfurtherdownthroughpointAat(800,60),andendsat(1,100,20).LineSnaughtstartsatw(0,20),passesalongpointtat(400,40),goesfurtheruptopointAat(800,60),andendsat(1,100,80).Thegraphenclosesanareadividedintotworegionsbythelinesatv(0,60),s(400,60),andpointA(800,60).Ablow-upsectionofpointrislabeledasfollows:(398,100.20),(399,100.10),(400,100).Notethattheabove-mentionedcoordinatevaluesareactualvalues.

Returntoparent-slidecontainingimages.59Figure2.7:DemandShifts(SupplyConstant)-TextAlternativeReturntoparent-slidecontainingimages.Theverticaly-axisislabeledpriceindollarsrangingfrom0to160inincrementsof20units.Thehorizontalx-axisislabeledquantity(QsubscriptdandQsubscriptS)rangingfrom0to1,600inincrementsof200units.Threedecreasingdiagonallinesandanincreasingdiagonalline,labeledDsubscript1,Dnaught,Dsubscript2,andSsubscriptnaughtrespectively,aredrawn.LineSnaughtstartsat(0,20),passesthroughpointCat(510,45),goesupwardtopointAat(800,60),thenpassestopointBat(900,70),andendsat(1,400,80).LineDsubscript1startsat(0,160),intersectslineSnaughtatpointBandthenendsat(1,600,0).LineDnaughtstartsat(0,140),intersectslineSnaughtatpointA,andthenendsat(1,400,0).LineDsubscript2startsat(0,140),intersectslineSnaughtatpointCandthenendsat(1,000,0).Allthevaluesareapproximated.Returntoparent-slidecontainingimages.60Figure2.8:SupplyShifts(DemandConstant)-TextAlternativeReturntoparent-slidecontainingimages.Theverticaly-axisislabeledpriceindollarsrangingfrom0to160inincrementsof20units.Thehorizontalx-axisislabeledquantity(QsubscriptdandQsubscripts)rangingfrom0to1,600inincrementsof200units.Threeincreasingdiagonallinesandadecreasingdiagonalline,labeledSsubscript2,Snaught,Ssubscript1,andDnaughtrespectively,aredrawn.LineSsubscript1startsat(0,0),passesthroughpointBat(900,50),andendsat(1,300,70).LineSnaughtstartsat(0,20),passesthroughpointAat(800,60),andendsat(1,300,80).LineSsubscript2startsat(0,25)andpassesthroughpointCat(700,70).LineDnaughtstartsat(0,140),intersectslineSsubscript2atpointC,movesdownward,andintersectslineSnaughtatpointA,thenintersectslineSsubscript1atpointB,andthenendsat(1,400,0).

Returntoparent-slidecontainingimages.61Figure2.9:ShiftsinBothDemandandSupply,DemandandSupplyBothIncrease-TextAlternativeReturntoparent-slidecontainingimages.Theverticaly-axisislabeledpriceandthehorizontalx-axisislabeledquantity.Theaxeshavenoscalesorunits.Fivelines,labeledS,Sprime,Sdoubleprime,Dprime,andD,aredrawn.LineShasapositiveslopeandpassesalongpointAat(Q,P).LineSprimeisbelowlineSandisparalleltoit,anditpassesthroughpointBat(Qdoubleprime,Pprime).LineSdoubleprimeisadashedline,paralleltoSprime,andpassesthroughpointCat(Qdoubleprime,Pdoubleprime).LineDprimehasanegativeslopeandintersectslinesS,SprimeatpointB,andlineSdoubleprimeatpointC.LineDhasanegativeslopeandintersectslineSatpointA,andintersectslineSprimeandSdoubleprime.Notethattheabove-mentionedcoordinatevaluesareapproximate.

Returntoparent-slidecontainingimages.62Figure2.10:SummaryofSimultaneousShiftsinDemandandSupply,theFourPossibleCases-TextAlternativeReturntoparent-slidecontainingimages.PanelA:thegraphplotsthepriceversusquantityexplainingtheincreaseinquantity.FivelineslabeledS,Sprime,Sdoubleprime,Dprime,andD,areplottedinthefirstquadrantofacoordinateplane.LineShasapositiveslopeandpassesthroughpointAat(Q,P).LineSprimeisbelowlineSandisparalleltoit.ItpassesthroughpointBat(Qdoubleprime,Pprime).LineSdoubleprimeisadashedline,paralleltoSprime,andpassesthroughpointCat(Qdoubleprime,Pdoubleprime).LineDprimehasanegativeslopeandintersectslineS,SprimeatpointB,andlineSdoubleprimeatpointC.LineDhasanegativeslopeandintersectslineSatpointA,andfurtherintersectslineSprimeandSdoubleprime.ThehorizontaldistancebetweenpointAandpointBismarkedbyanarrow,anditdenotespricemayriseorfall,andquantityrises.PanelB:Thegraphplotsthepriceversusquantityexplainingthepricedecrease.FivelineslabeledS,Sprime,Sdoubleprime,Dprime,andD,areplottedinthefirstquadrantofacoordinateplane.Thecoordinateplanehasnolabels,scales,orunits.LineShasapositiveslopeandpassesthroughpointAat(Q,P).LineSprimeisbelowlineSandisparalleltoit.ItpassesthroughpointBat(Qdoubleprime,Pprime).LineSdoubleprimeisadashedline,paralleltolineSprime,andpassesthroughpointC.LineDprimehasanegativeslopeandintersectslineSatpointB,andlineSdoubleprimeatpointC.LineDhasanegativeslopeandintersectsthelineSatpointA,andintersectslinesSprimeandSdoubleprime.TheverticaldistancebetweenpointAandpointBismarkedbyanarrowanddenotespricefalls.PanelC:Thegraphplotsthepriceversusquantityexplainingthepriceincrease.FivelineslabeledS,Sprime,Sdoubleprime,Dprime,andD,areplottedinthefirstquadrantofacoordinateplane.Thecoordinateplanehasnolabels,scales,orunits.LineSdoubleprimedenotedbyadashedlinehasapositiveslopeandpassesthroughpointC.LineSprimehasapositiveslopeandpassesthroughpointBat(Qprime,Pprime).LineSispresentbelowlineSprimeanditisparalleltolineSprime.ItpassesthroughpointAat(Q,P).LineDprimehasanegativeslopeandintersectslineSdoubleprimeatpointC,lineSprimeatpointB,andlineS.LineDhasanegativeslopeandintersectslineSdoubleprime,lineSprime,andlineSatpointA.