b) Shifts in equilibrium price and quantity

d) the use of supply and demand diagrams to show how shifts in demand and supply curves cause the equilibrium price and quantity to change in real world situations

change in demand or supply = change in equilibrium price and quantity

demand curve shifts left

• excess supply

• firms decrease prices

• equilibrium price decreases + equilibrium quantity decreases

demand curve shifts right

• excess demand

• firms increase prices

• equilibrium price increases + equilibrium quantity increases

supply curve shifts left

• excess demand

• firms increase prices

• equilibrium price increases + equilibrium quantity decreases

supply curve shifts right

• excess supply

• firms decrease prices

• equilibrium price decreases + equilibrium quantity increases