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AP Microeconomics 2.7 Market Disequilibrium and Changes in Equilibrium Questions

Explain how shortages, surpluses, and shifts in demand or supply move a competitive market toward a new equilibrium outcome.

Syllabus
Effective Fall 2022
Course
AP Microeconomics

Exam points

  • identify shortages or surpluses and explain the price movement that restores market equilibrium
  • combine single or simultaneous curve shifts to determine equilibrium changes and indeterminate outcomes
  • infer the underlying demand and supply changes from observed movements in equilibrium price and quantity
  • compare consumer, producer and total surplus before and after a market shock or disequilibrium adjustment

Covered syllabus points

MKT-4.B—a. Define a surplus and shortage. b. Explain (using graphs where appropriate) how changes in underlying conditions and shocks to a…

Question 1

[Maximum number: 1]

Sugar is produced in a perfectly competitive market using inputs from perfectly competitive factor markets. Frank Sugar Co. is a representative firm in the sugar market.

Assume the demand for sugar increases and sugar is produced in a constant-cost industry.

On your graph in part (a), show the short-run effect of the increased demand for sugar on the market price, labeled P2\mathrm{P}_{2}, and the quantity sold by Frank Sugar Co., labeled QN\mathrm{Q}_{\mathrm{N}}.

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