6. Shifts in supply or demand I The following graph shows the market for donuts in Detroit, where there are over a thousand donut shops at any given moment. Suppose the Surgeon General issues a public statement saying that consuming donuts is bad for your health. Show the effect of this change on the market for donuts by shifting one or both of the curves on the following graph, holding all else constant. PRICE (Dollars per donut) QUANTITY (Donuts) Supply Demand Demand 10 Supply

no handwritten notes

Whats the market equilibrium price and the graph?

1. Movements along versus shifts of demand and supply curves The following two graphs depict the market for doughnuts. On the first graph that follows, show the effect of a shift of the entire demand curve resulting from consumers wanting to buy more doughnuts at every given price. Note: Select and drag the curve to the desired position. The curve will snap into position, so if you try to move the curve and it snaps back to its original position, just drag it a little farther. Demand PRICE (Dollars per box of doughnuts) QUANTITY (Boxes of doughnuts) Demand On the next graph, show the effect of a movement along a fixed demand curve that results from a decrease in the price of doughnuts, with every other factor held constant. Demand PRICE (Dollars per box of doughnuts) QUANTITY (Boxes of doughnuts) Demand Consider the market for doughnuts. Complete the following table by indicating whether each event will cause a movement along the demand curve for doughnuts or a shift of the demand…