2.4.2—Demand/supply shifts and equilibrium

A demand or supply shift changes the intersection of the curves. A rightward demand shift usually raises equilibrium price and quantity; a rightward supply shift usually lowers price and raises quantity, with the exact outcome depending on elasticities.

Draw the original and new curves, identify the new intersection, then explain the movement through shortage or surplus pressure.

A harvest failure shifts supply left, tending to raise food price and reduce quantity; a successful advertising campaign shifts demand right, tending to raise both.

Do not assume every demand shift raises quantity: a leftward shift lowers it, and simultaneous shifts can produce ambiguous outcomes.