{"version":1,"lectureId":"01M14TXYVM991EQBXEF3E9CSZ8","attempt":0,"publication":{"slug":"supply-and-demand-actually-moving","title":"Supply and Demand in Motion: Equilibrium, Shifts, and Movements Along Curves","subject":"economics","summary":"An introductory lesson that builds demand and supply from the choices each curve represents, finds market equilibrium through shortages and surpluses, and makes the difference between movement along a curve and a shift of the whole curve unmistakable. A bad harvest, a favorable change in consumer taste, and a new competitor are traced from the initial equilibrium to new prices and quantities.","metaDescription":"Learn supply, demand, and equilibrium, then see how harvests, tastes, and new competitors shift curves and change market outcomes.","transcript":"Suppose we are studying one ordinary market, perhaps sacks of flour sold during one week. Two measurements matter. Price tells us how much one sack costs, and quantity tells us how many sacks are bought and sold. Put quantity across the bottom and price up the side. A point in this picture is one possible pair, one quantity together with one price. Our first question concerns buyers. At each possible price, how many sacks would they choose to purchase? A demand curve collects all those answers. This blue line is the demand curve. It slopes downward because, with other influences held fixed, a lower price usually makes buying attractive to more people and makes some existing buyers willing to buy more. That final qualification matters. We are comparing prices while income, preferences, the number of buyers, and other market conditions remain the same. The curve is a controlled comparison, not a claim that nothing else in the world can ever change. For a concrete example, let the demand rule be price equals one hundred minus two times quantity. At quantity twenty, the corresponding price is sixty. Read that point in the direction buyers actually face the choice. If the market price is sixty, buyers choose quantity twenty. The graph and the equation are saying exactly the same thing. Now let the price fall from sixty to forty. We do not draw a new demand curve. We travel down and to the right on the blue curve, reaching quantity thirty. This is called an increase in quantity demanded. It is movement along the existing demand curve, caused by the change in the product's own price. The relationship represented by the blue curve has not changed. Reverse the experiment. Let price rise to eighty. Buyers move up and left on that same curve, and quantity demanded falls to ten. Again, the curve itself did not move. A different price selected a different point from the same list of buyer choices. Price change means movement along demand. Return to price sixty and quantity twenty. Keep that point in mind, because later we will change something other than price. When that happens, one blue curve will no longer contain the buyer choices we need. Buyers are only half the market. Sellers also make a choice. At every possible price, how many units are farms, shops, or factories willing to produce and offer for sale? The green supply curve collects those seller choices. It usually slopes upward. A higher price can cover the cost of more difficult units and can make extra production worthwhile. Once again, other conditions are held fixed. Technology, input costs, weather, taxes, and the number of sellers are not changing while we trace this one curve. Use the supply rule price equals twenty plus two times quantity. At price forty, sellers choose to offer ten units. Raise the price to eighty. Sellers move up and right on the same green curve, offering thirty units. This is an increase in quantity supplied, not a shift of supply. A price change therefore produces movement along supply, just as a price change produced movement along demand. The slopes differ because buyers and sellers respond to price in opposite directions. Now place buyer plans and seller plans in the same market. The blue demand curve slopes down. The green supply curve slopes up. Their crossing asks whether the two groups can agree. First try a price of eighty. At that price buyers want ten units, while sellers offer thirty. Sellers are offering twenty more units than buyers want. That excess is a surplus. Unsold goods give sellers a reason to cut price. As price falls, quantity supplied moves down its green curve and quantity demanded moves down and right on its blue curve. Now try a price of forty. Sellers offer ten units, but buyers want thirty. Buyers want twenty more units than sellers offer. That gap is a shortage. Competing buyers and sellers who see goods selling quickly have a reason to raise price. Rising price reduces quantity demanded and increases quantity supplied. The pressure to change price stops at the crossing. At price sixty, buyers choose twenty units and sellers offer twenty units. No planned purchases or sales are left unmatched. Algebra reaches the same point. Set the demand price equal to the supply price. Solving gives equilibrium quantity twenty and equilibrium price sixty. Equilibrium does not mean that everyone loves the outcome or that the market can never change. It means that, under the current demand and supply conditions, buyer plans and seller plans agree at one price and quantity. We now need the distinction that prevents most early mistakes in supply and demand. Two pictures can contain a moving point, yet describe two completely different economic events. First, movement along a curve. Begin at price sixty and quantity twenty. If this product's own price falls to forty, quantity demanded rises to thirty. The blue curve did not change its location, slope, or meaning. We simply selected another point from the same relationship. The cause was a change in the price shown on the vertical axis. Return to the original point. This time hold the displayed price at sixty. Imagine that the product becomes fashionable, so buyers want more of it even though its price has not changed. Fashion is not the price of the product. It is a non-price influence on demand. The old blue relationship is no longer enough, because at every price buyers now choose a larger quantity. Watch the entire red demand curve shift to the right. In this inverse price picture the same change also looks upward. The important fact is that every point of the relationship moves together. At the unchanged price sixty, the old curve says quantity twenty and the new curve says quantity thirty. That comparison at one fixed price proves that this is a shift, not movement caused by price. The language is precise. A price change causes a change in quantity demanded, represented by movement along one demand curve. A change in taste causes a change in demand, represented by a shift of the curve. Use the diagnostic every time. Did the product's own price change while the relationship stayed fixed? Move along. Did income, taste, population, expectations, production conditions, or the number of sellers change? Shift the appropriate curve. A single market story can contain both actions. A non-price event shifts one curve first. The resulting change in equilibrium price then produces movement along the other, unchanged curve. We will now repeat that order three times. Begin from the familiar equilibrium. Demand is blue, the original supply curve is gray, and their crossing is price sixty with quantity twenty. Now imagine a bad harvest. Weather has destroyed part of the crop. At any given market price, farms have fewer sacks available to sell. The product's current market price did not cause the crop loss. Weather is a non-price determinant of supply. Therefore this is not movement along the old gray curve. Reveal the new supply curve on top of the old one, then let the entire red relationship shift left and upward. At every price, the quantity sellers can offer is smaller. Hold price at its old value of sixty. Buyers still want twenty units, but the damaged harvest supplies only ten. The ten-unit gap is a shortage. A shortage puts upward pressure on price. As price rises, buyers move up and left along the unchanged blue demand curve, reducing quantity demanded. At the same time sellers move along their new red supply curve. The adjustment stops at the new crossing. Price is seventy and quantity is fifteen. The bad harvest has raised equilibrium price and reduced equilibrium quantity. Name the two actions separately. Weather shifted the supply curve. The resulting rise in price moved buyers along the demand curve. Calling the whole story movement along supply would erase its actual cause. Reset the market to the same starting equilibrium. Quantity is twenty and price is sixty. The old demand curve is gray, and supply is green. Now suppose the product becomes fashionable. Perhaps a popular recipe makes these sacks of flour especially desirable. Buyers want more at each possible price. Taste is not the product's own price. Because a non-price determinant of demand changed, the entire demand relationship must shift. This example uses a favorable taste change, so demand increases. Place the new red demand curve over the old one, then shift it right and upward. Every point moves because buyer willingness has changed throughout the market. At the old price sixty, sellers still offer twenty units, but buyers now want thirty. That ten-unit shortage shows why the old price cannot remain the equilibrium price. Price rises. The supply curve itself has not shifted, so sellers respond by moving up and right along that same green curve. The new equilibrium reaches quantity twenty-five and price seventy. At the new crossing, both equilibrium price and equilibrium quantity are higher. The favorable taste change increased demand, and the resulting higher price increased quantity supplied. Keep the grammar exact. Taste shifted demand. Price then caused movement along unchanged supply. If the product had become less popular, demand would instead shift left, reversing these directional pressures. Reset once more to the original equilibrium: price sixty and quantity twenty. Demand is blue, original supply is gray, and the yellow point is their crossing. Now a new competitor enters the market. There is another seller with workers, equipment, and stock ready to serve buyers. At every given price, total market production can be larger. Entry is not a change in the product's market price. It changes the number of sellers, a non-price determinant of supply. We therefore shift the entire supply curve. Reveal the new red supply curve, then shift it right and downward. At a fixed price, the combined sellers now offer a greater quantity. Hold price at sixty. Buyers still want twenty units, but sellers now offer thirty. The extra ten units form a surplus, so the old price is too high to clear the market. Competition among sellers puts downward pressure on price. As price falls, buyers move down and right along the unchanged blue demand curve, while sellers move along their new red supply curve. The new crossing has price fifty and quantity twenty-five. Entry lowers the equilibrium price and raises the equilibrium quantity. Again, two actions belong to one story. The competitor shifted supply. The resulting fall in price caused movement along demand. The yellow point moved, but that does not make every part of the story movement along a curve. Put the three experiments together. A bad harvest reduced supply, so supply shifted left. Price rose and quantity fell. A favorable change in taste increased demand, so demand shifted right. Both equilibrium price and equilibrium quantity rose. A new competitor increased supply, so supply shifted right. Equilibrium price fell, while equilibrium quantity rose. Notice that quantity rose in the last two cases, but for different reasons. Taste shifted demand and raised price. Entry shifted supply and lowered price. Watching quantity alone cannot identify which curve changed. Price also rose in two cases. After the harvest, higher price moved buyers along demand. After the taste change, higher price moved sellers along supply. The initiating shifts were different even though the price direction matched. So use this method. First identify the event that happened before price adjusted. Decide whether it changes buyer choices or seller choices at every price, and shift that curve. Second, inspect the old price. The shifted curve creates a shortage or a surplus. That imbalance tells you whether price rises or falls. Third, follow the price adjustment to the new crossing. Price change moves the market along the curve that did not shift. The new crossing gives the new equilibrium price and quantity. A movement along a curve answers what happens when price changes within one fixed relationship. A shift answers what happens when the relationship itself changes. Market adjustment often contains both, in that order.","watch":{"version":1,"scenes":[{"title":"What a Demand Curve Claims","start":0,"end":148.8745208333333,"objects":{"choice":"a PlotPoint [yellow] labelled \"A\" drawn in plot (target='demand_curve', x=<VariableNumber chosen_q = 20.0>)","chosen_q":"a VariableNumber (initial_value=20.0, format_spec='.0f')","definition":"a Panel that says \"A demand curve records the quantity buyers would choose at each price, while other influences on buying are held fixed.\"","demand_curve":"a FunctionPlot [blue] labelled \"D\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","demand_rule":"a Math [text] that says \"$P_D = 100 - 2Q$\"","heading":"a Heading that says \"What a Demand Curve Claims\"","horizontal_guide":"a Line [gray] drawn in plot (start=(0.0, (100.0 - (2.0 * chosen_q))), end=(<VariableNumber chosen_q = 20.0>, (100.0 - (2.0 * chosen_q))), dashed=True)","plot":"an Axes (x_range=(0.0, 45.0), y_range=(0.0, 125.0), x_ticks_every=5.0)","question":"a Panel that says \"At each possible price, how many units would buyers choose to purchase?\"","reading":"a Math [text] that says \"$Q = 20 arrow.r P = 60$\"","vertical_guide":"a Line [gray] drawn in plot (start=(<VariableNumber chosen_q = 20.0>, 0.0), end=(<VariableNumber chosen_q = 20.0>, (100.0 - (2.0 * chosen_q))), dashed=True)"},"beats":[{"start":0,"say":"Suppose we are studying one ordinary market, perhaps sacks of flour sold during one week. Two measurements matter. Price tells us how much one sack costs, and quantity tells us how many sacks are bought and sold.","live":[],"does":[[0,"question is shown on the screen, written out."]]},{"start":14.6365,"say":"Put quantity across the bottom and price up the side. A point in this picture is one possible pair, one quantity together with one price.","live":["question"],"does":[[15.263,"plot is shown on the screen, written out."]]},{"start":24.791,"say":"Our first question concerns buyers. At each possible price, how many sacks would they choose to purchase? A demand curve collects all those answers.","live":["plot","question"],"does":[[32.953,"demand_curve is shown on the screen, drawn."],[35.7395,"plot moves to a new place on the board."],[35.7395,"question is hidden from the screen — left the board."]]},{"start":36.3395,"say":"This blue line is the demand curve. It slopes downward because, with other influences held fixed, a lower price usually makes buying attractive to more people and makes some existing buyers willing to buy more.","live":["plot","demand_curve"],"does":[[36.3395,"heading is shown on the screen, written out."],[37.002,"demand_curve is indicated — a transient flash."],[37.895,"definition is shown on the screen, written out."]]},{"start":50.2155,"say":"That final qualification matters. We are comparing prices while income, preferences, the number of buyers, and other market conditions remain the same. The curve is a controlled comparison, not a claim that nothing else in the world can ever change.","live":["plot","demand_curve","definition","heading"],"does":[[59.185,"definition (the \"held fixed\" part) is emphasized."],[65.9415,"definition (the \"held fixed\" part) is no longer emphasized."]]},{"start":66.5415,"say":"For a concrete example, let the demand rule be price equals one hundred minus two times quantity. At quantity twenty, the corresponding price is sixty.","live":null,"does":[[69.374,"demand_rule is shown on the screen, written out."],[73.461,"vertical_guide is shown on the screen, written out."],[73.902,"choice is shown on the screen, written out."],[75.818,"horizontal_guide is shown on the screen, written out."],[75.818,"reading is shown on the screen, written out."]]},{"start":77.3235,"say":"Read that point in the direction buyers actually face the choice. If the market price is sixty, buyers choose quantity twenty. The graph and the equation are saying exactly the same thing.","live":["plot","demand_curve","definition","demand_rule","reading","heading","choice","vertical_guide","horizontal_guide"],"does":[[78.148,"choice is indicated — a transient flash."],[82.71,"reading (the \"P = 60\" part) is emphasized."],[84.661,"reading (the \"P = 60\" part) is no longer emphasized."],[84.661,"reading (the \"Q = 20\" part) is emphasized."],[89.2465,"reading (the \"Q = 20\" part) is no longer emphasized."]]},{"start":89.84649999999999,"say":"Now let the price fall from sixty to forty. We do not draw a new demand curve. We travel down and to the right on the blue curve, reaching quantity thirty.","live":null,"does":[[91.008,"choice is redrawn as the numbers it depends on change."],[91.008,"vertical_guide is redrawn as the numbers it depends on change."],[91.008,"horizontal_guide is redrawn as the numbers it depends on change."],[91.008,"chosen_q ticks to 30.0."],[99.007,"reading becomes \"$Q = 30 arrow.r P = 40$\"."]]},{"start":100.31549999999999,"say":"This is called an increase in quantity demanded. It is movement along the existing demand curve, caused by the change in the product's own price. The relationship represented by the blue curve has not changed.","live":null,"does":[[103.92599999999999,"choice is indicated — a transient flash."],[104.84299999999999,"demand_curve is indicated — a transient flash."]]},{"start":113.48849999999999,"say":"Reverse the experiment. Let price rise to eighty. Buyers move up and left on that same curve, and quantity demanded falls to ten.","live":null,"does":[[116.379,"choice is redrawn as the numbers it depends on change."],[116.379,"vertical_guide is redrawn as the numbers it depends on change."],[116.379,"horizontal_guide is redrawn as the numbers it depends on change."],[116.379,"chosen_q ticks to 10.0."],[122.126,"reading becomes \"$Q = 10 arrow.r P = 80$\"."]]},{"start":123.57349999999998,"say":"Again, the curve itself did not move. A different price selected a different point from the same list of buyer choices. Price change means movement along demand.","live":null,"does":[[124.654,"demand_curve is indicated — a transient flash."],[128.29899999999998,"choice is indicated — a transient flash."]]},{"start":134.57649999999998,"say":"Return to price sixty and quantity twenty. Keep that point in mind, because later we will change something other than price. When that happens, one blue curve will no longer contain the buyer choices we need.","live":null,"does":[[134.832,"choice is redrawn as the numbers it depends on change."],[134.832,"vertical_guide is redrawn as the numbers it depends on change."],[134.832,"horizontal_guide is redrawn as the numbers it depends on change."],[134.832,"chosen_q ticks to 20.0."],[136.887,"reading becomes \"$Q = 20 arrow.r P = 60$\"."],[147.83285416666664,"definition is hidden from the screen — left the board."],[147.83285416666664,"demand_rule is hidden from the screen — left the board."],[147.83285416666664,"heading is hidden from the screen — left the board."],[147.83285416666664,"plot is hidden from the screen — left the board."],[147.83285416666664,"demand_curve is hidden from the screen — plot left the board."],[147.83285416666664,"choice is hidden from the screen — plot left the board."],[147.83285416666664,"vertical_guide is hidden from the screen — plot left the board."],[147.83285416666664,"horizontal_guide is hidden from the screen — plot left the board."],[147.83285416666664,"reading is hidden from the screen — left the board."]]}]},{"title":"Supply Meets Demand","start":148.8745208333333,"end":321.64864583333326,"objects":{"chosen_q":"a VariableNumber (initial_value=10.0, format_spec='.0f')","demand_curve":"a FunctionPlot [blue] labelled \"D\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","equilibrium":"a PlotPoint [red] labelled \"E\" drawn in plot (target='demand_curve', x=20.0)","equilibrium_work":"a Derivation [text] that says \"$P_D &= 100 - 2Q \\ P_S &= 20 + 2Q \\ 100 - 2Q &= 20 + 2Q \\ Q^star &= 20, thin P^star = 60$\"","high_demand":"a PlotPoint [blue] labelled \"Q_d=10\" drawn in plot (target='demand_curve', x=10.0)","high_supply":"a PlotPoint [green] labelled \"Q_s=30\" drawn in plot (target='supply_curve', x=30.0)","low_demand":"a PlotPoint [blue] labelled \"Q_d=30\" drawn in plot (target='demand_curve', x=30.0)","low_supply":"a PlotPoint [green] labelled \"Q_s=10\" drawn in plot (target='supply_curve', x=10.0)","plot":"an Axes (x_range=(0.0, 45.0), y_range=(0.0, 125.0), x_ticks_every=5.0)","question":"a Panel that says \"At what price do buyers and sellers independently choose the same quantity?\"","shortage":"a Brace [yellow] labelled \"upright(\"shortage\")\" drawn in plot (x_start=10.0, x_end=30.0, y=40.0)","supply_choice":"a PlotPoint [yellow] labelled \"B\" drawn in plot (target='supply_curve', x=<VariableNumber chosen_q = 30.0>)","supply_curve":"a FunctionPlot [green] labelled \"S\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","supply_definition":"a Panel that says \"A supply curve records the quantity sellers would choose to offer at each price, while other influences on production are held fixed.\"","supply_heading":"a Heading that says \"What a Supply Curve Claims\"","supply_horizontal":"a Line [gray] drawn in plot (start=(0.0, (20.0 + (2.0 * chosen_q))), end=(<VariableNumber chosen_q = 30.0>, (20.0 + (2.0 * chosen_q))), dashed=True)","supply_reading":"a Math [text] that says \"$Q = 10 arrow.r P = 40$\"","supply_rule":"a Math [text] that says \"$P_S = 20 + 2Q$\"","supply_vertical":"a Line [gray] drawn in plot (start=(<VariableNumber chosen_q = 30.0>, 0.0), end=(<VariableNumber chosen_q = 30.0>, (20.0 + (2.0 * chosen_q))), dashed=True)","surplus":"a Brace [yellow] labelled \"upright(\"surplus\")\" drawn in plot (x_start=10.0, x_end=30.0, y=80.0)"},"beats":[{"start":148.8745208333333,"say":"Buyers are only half the market. Sellers also make a choice. At every possible price, how many units are farms, shops, or factories willing to produce and offer for sale?","live":[],"does":[[148.8745208333333,"supply_heading is shown on the screen, written out."],[150.2215208333333,"plot is shown on the screen, written out."],[151.3355208333333,"supply_curve is shown on the screen, drawn."]]},{"start":161.3980208333333,"say":"The green supply curve collects those seller choices. It usually slopes upward. A higher price can cover the cost of more difficult units and can make extra production worthwhile.","live":["plot","supply_heading","supply_curve"],"does":[[161.92052083333328,"supply_curve is indicated — a transient flash."],[162.19952083333328,"plot moves to a new place on the board."],[162.19952083333328,"supply_definition is shown on the screen, written out."]]},{"start":173.9910208333333,"say":"Once again, other conditions are held fixed. Technology, input costs, weather, taxes, and the number of sellers are not changing while we trace this one curve.","live":["supply_definition","plot","supply_heading","supply_curve"],"does":[[176.2785208333333,"supply_definition (the \"held fixed\" part) is emphasized."],[185.0440208333333,"supply_definition (the \"held fixed\" part) is no longer emphasized."]]},{"start":185.6440208333333,"say":"Use the supply rule price equals twenty plus two times quantity. At price forty, sellers choose to offer ten units.","live":null,"does":[[186.8285208333333,"supply_rule is shown on the screen, written out."],[190.7525208333333,"supply_horizontal is shown on the screen, written out."],[190.7525208333333,"supply_reading is shown on the screen, written out."],[192.6095208333333,"supply_choice is shown on the screen, written out."],[192.6095208333333,"supply_vertical is shown on the screen, written out."]]},{"start":194.2780208333333,"say":"Raise the price to eighty. Sellers move up and right on the same green curve, offering thirty units. This is an increase in quantity supplied, not a shift of supply.","live":["supply_definition","supply_rule","supply_reading","plot","supply_heading","supply_curve","supply_choice","supply_vertical","supply_horizontal"],"does":[[194.57952083333328,"supply_choice is redrawn as the numbers it depends on change."],[194.57952083333328,"supply_vertical is redrawn as the numbers it depends on change."],[194.57952083333328,"supply_horizontal is redrawn as the numbers it depends on change."],[194.57952083333328,"chosen_q ticks to 30.0."],[198.2485208333333,"supply_curve is indicated — a transient flash."],[200.0245208333333,"supply_reading becomes \"$Q = 30 arrow.r P = 80$\"."]]},{"start":206.20902083333328,"say":"A price change therefore produces movement along supply, just as a price change produced movement along demand. The slopes differ because buyers and sellers respond to price in opposite directions.","live":null,"does":[[208.2055208333333,"supply_choice is indicated — a transient flash."],[217.11052083333328,"supply_choice is hidden from the screen."],[217.11052083333328,"supply_vertical is hidden from the screen."],[217.11052083333328,"supply_horizontal is hidden from the screen."],[218.67802083333328,"plot moves to a new place on the board."],[218.67802083333328,"supply_definition is hidden from the screen — left the board."],[218.67802083333328,"supply_heading is hidden from the screen — left the board."],[218.67802083333328,"supply_reading is hidden from the screen — left the board."],[218.67802083333328,"supply_rule is hidden from the screen — left the board."]]},{"start":219.8780208333333,"say":"Now place buyer plans and seller plans in the same market. The blue demand curve slopes down. The green supply curve slopes up. Their crossing asks whether the two groups can agree.","live":["plot","supply_curve"],"does":[[219.8780208333333,"question is shown on the screen, written out."],[223.9885208333333,"demand_curve is shown on the screen, drawn."]]},{"start":232.8430208333333,"say":"First try a price of eighty. At that price buyers want ten units, while sellers offer thirty. Sellers are offering twenty more units than buyers want.","live":["plot","supply_curve","question","demand_curve"],"does":[[236.6625208333333,"high_demand is shown on the screen, written out."],[238.6825208333333,"high_supply is shown on the screen, written out."],[240.8655208333333,"surplus is shown on the screen, written out."]]},{"start":243.7410208333333,"say":"That excess is a surplus. Unsold goods give sellers a reason to cut price. As price falls, quantity supplied moves down its green curve and quantity demanded moves down and right on its blue curve.","live":["plot","supply_curve","question","demand_curve","high_demand","high_supply","surplus"],"does":[[245.02952083333332,"surplus is indicated — a transient flash."],[251.0555208333333,"high_demand is hidden from the screen."],[251.0555208333333,"high_supply is hidden from the screen."],[251.0555208333333,"surplus is hidden from the screen."]]},{"start":258.5400208333333,"say":"Now try a price of forty. Sellers offer ten units, but buyers want thirty. Buyers want twenty more units than sellers offer.","live":["plot","supply_curve","question","demand_curve"],"does":[[261.69752083333333,"low_supply is shown on the screen, written out."],[263.6025208333333,"low_demand is shown on the screen, written out."],[265.47152083333333,"shortage is shown on the screen, written out."]]},{"start":268.3240208333333,"say":"That gap is a shortage. Competing buyers and sellers who see goods selling quickly have a reason to raise price. Rising price reduces quantity demanded and increases quantity supplied.","live":["plot","supply_curve","question","demand_curve","low_supply","low_demand","shortage"],"does":[[269.3335208333333,"shortage is indicated — a transient flash."],[275.9635208333333,"low_supply is hidden from the screen."],[275.9635208333333,"low_demand is hidden from the screen."],[275.9635208333333,"shortage is hidden from the screen."]]},{"start":281.47402083333327,"say":"The pressure to change price stops at the crossing. At price sixty, buyers choose twenty units and sellers offer twenty units. No planned purchases or sales are left unmatched.","live":["plot","supply_curve","question","demand_curve"],"does":[[283.8195208333333,"equilibrium is shown on the screen, written out."],[286.4665208333333,"equilibrium_work is shown on the screen, written out."],[288.2895208333333,"equilibrium_work is shown on the screen, written out."]]},{"start":294.88002083333333,"say":"Algebra reaches the same point. Set the demand price equal to the supply price. Solving gives equilibrium quantity twenty and equilibrium price sixty.","live":["plot","supply_curve","question","demand_curve","equilibrium"],"does":[[299.0825208333333,"equilibrium_work is shown on the screen, written out."],[303.35452083333325,"equilibrium_work is shown on the screen, written out."],[306.2340208333333,"A box is drawn around equilibrium_work."]]},{"start":306.8340208333333,"say":"Equilibrium does not mean that everyone loves the outcome or that the market can never change. It means that, under the current demand and supply conditions, buyer plans and seller plans agree at one price and quantity.","live":null,"does":[[318.1885208333333,"equilibrium is indicated — a transient flash."],[320.60697916666663,"equilibrium_work is hidden from the screen — left the board."],[320.60697916666663,"plot is hidden from the screen — left the board."],[320.60697916666663,"supply_curve is hidden from the screen — plot left the board."],[320.60697916666663,"demand_curve is hidden from the screen — plot left the board."],[320.60697916666663,"equilibrium is hidden from the screen — plot left the board."],[320.60697916666663,"question is hidden from the screen — left the board."]]}]},{"title":"Movement Along or Shift of the Curve?","start":321.64864583333326,"end":458.56072916666653,"objects":{"baseline":"a FunctionPlot [blue] labelled \"D_0\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","heading":"a Heading that says \"Two Different Kinds of Change\"","move_q":"a VariableNumber (initial_value=20.0)","movement_item":"a Text [text] that says \"Movement along: the product's own price changes, selecting another point on the same curve.\"","moving_point":"a PlotPoint [yellow] labelled \"A\" drawn in plot (target='baseline', x=<VariableNumber move_q = 20.0>)","moving_vertical":"a Line [gray] drawn in plot (start=(<VariableNumber move_q = 20.0>, 0.0), end=(<VariableNumber move_q = 20.0>, (100.0 - (2.0 * move_q))), dashed=True)","new_at_sixty":"a PlotPoint [red] labelled \"30\" drawn in plot (target='shifted', x=30.0)","old_at_sixty":"a PlotPoint [blue] labelled \"20\" drawn in plot (target='baseline', x=20.0)","plot":"an Axes (x_range=(0.0, 45.0), y_range=(0.0, 125.0), x_ticks_every=5.0)","same_price":"a Line [yellow] labelled \"P=60\" drawn in plot (start=(20.0, 60.0), end=(30.0, 60.0), dashed=True)","shift_item":"a Text [text] that says \"Shift: a non-price influence changes the quantities chosen at every price.\"","shifted":"a FunctionPlot [red] labelled \"D_1\" drawn in plot (function=<function>, x_range=(0.0, 45.0), y_offset=<VariableNumber taste_shift = 20.0>)","taste_shift":"a VariableNumber","test_item":"a Text [text] that says \"Diagnostic: ask whether price selected a new point, or whether the whole price-quantity relationship changed.\""},"beats":[{"start":321.64864583333326,"say":"We now need the distinction that prevents most early mistakes in supply and demand. Two pictures can contain a moving point, yet describe two completely different economic events.","live":[],"does":[[321.64864583333326,"heading is shown on the screen, written out."],[321.64864583333326,"plot is shown on the screen, written out."],[326.80364583333323,"baseline is shown on the screen, drawn."]]},{"start":332.69764583333324,"say":"First, movement along a curve. Begin at price sixty and quantity twenty. If this product's own price falls to forty, quantity demanded rises to thirty.","live":["plot","heading","baseline"],"does":[[333.59164583333325,"plot moves to a new place on the board."],[333.59164583333325,"movement_item is shown on the screen, written out."],[337.42264583333326,"moving_point is shown on the screen, written out."],[337.42264583333326,"moving_vertical is shown on the screen, written out."],[340.05764583333325,"moving_point is redrawn as the numbers it depends on change."],[340.05764583333325,"moving_vertical is redrawn as the numbers it depends on change."],[340.05764583333325,"move_q ticks to 30.0."]]},{"start":344.1526458333333,"say":"The blue curve did not change its location, slope, or meaning. We simply selected another point from the same relationship. The cause was a change in the price shown on the vertical axis.","live":["movement_item","plot","heading","baseline","moving_point","moving_vertical"],"does":[[344.6166458333333,"baseline is indicated — a transient flash."],[350.65364583333326,"moving_point is indicated — a transient flash."]]},{"start":356.8736458333333,"say":"Return to the original point. This time hold the displayed price at sixty. Imagine that the product becomes fashionable, so buyers want more of it even though its price has not changed.","live":null,"does":[[357.17564583333325,"moving_point is redrawn as the numbers it depends on change."],[357.17564583333325,"moving_vertical is redrawn as the numbers it depends on change."],[357.17564583333325,"move_q ticks to 20.0."],[364.35064583333326,"moving_point is hidden from the screen."],[364.35064583333326,"moving_vertical is hidden from the screen."]]},{"start":369.6286458333333,"say":"Fashion is not the price of the product. It is a non-price influence on demand. The old blue relationship is no longer enough, because at every price buyers now choose a larger quantity.","live":["movement_item","plot","heading","baseline"],"does":[[373.06564583333324,"shift_item is shown on the screen, written out."],[378.7196458333333,"shifted is shown on the screen, written out."]]},{"start":382.24514583333325,"say":"Watch the entire red demand curve shift to the right. In this inverse price picture the same change also looks upward. The important fact is that every point of the relationship moves together.","live":["movement_item","shift_item","plot","heading","baseline","shifted"],"does":[[384.55564583333324,"shifted is redrawn as the numbers it depends on change."],[384.55564583333324,"taste_shift ticks to 20.0."]]},{"start":394.65214583333324,"say":"At the unchanged price sixty, the old curve says quantity twenty and the new curve says quantity thirty. That comparison at one fixed price proves that this is a shift, not movement caused by price.","live":null,"does":[[398.5656458333333,"old_at_sixty is shown on the screen, written out."],[400.65464583333323,"new_at_sixty is shown on the screen, written out."],[403.3256458333333,"same_price is shown on the screen, written out."]]},{"start":408.4531458333332,"say":"The language is precise. A price change causes a change in quantity demanded, represented by movement along one demand curve. A change in taste causes a change in demand, represented by a shift of the curve.","live":["movement_item","shift_item","plot","heading","baseline","shifted","old_at_sixty","new_at_sixty","same_price"],"does":[[410.9026458333333,"movement_item (the \"price changes\" part) is emphasized."],[418.15864583333325,"shift_item (the \"non-price influence\" part) is emphasized."],[418.15864583333325,"movement_item (the \"price changes\" part) is no longer emphasized."],[422.87264583333325,"shift_item (the \"non-price influence\" part) is no longer emphasized."]]},{"start":423.4726458333332,"say":"Use the diagnostic every time. Did the product's own price change while the relationship stayed fixed? Move along. Did income, taste, population, expectations, production conditions, or the number of sellers change? Shift the appropriate curve.","live":null,"does":[[424.55264583333326,"test_item is shown on the screen, written out."],[427.47864583333325,"test_item (the \"price selected a new point\" part) is emphasized."],[428.53464583333323,"test_item (the \"whole price-quantity relationship changed\" part) is emphasized."],[441.16614583333325,"test_item (the \"price selected a new point\" part) is no longer emphasized."],[441.16614583333325,"test_item (the \"whole price-quantity relationship changed\" part) is no longer emphasized."]]},{"start":441.7661458333332,"say":"A single market story can contain both actions. A non-price event shifts one curve first. The resulting change in equilibrium price then produces movement along the other, unchanged curve. We will now repeat that order three times.","live":["movement_item","shift_item","test_item","plot","heading","baseline","shifted","old_at_sixty","new_at_sixty","same_price"],"does":[[446.5616458333333,"shifted is indicated — a transient flash."],[453.0276458333332,"baseline is indicated — a transient flash."],[457.5190624999999,"heading is hidden from the screen — left the board."],[457.5190624999999,"movement_item is hidden from the screen — left the board."],[457.5190624999999,"plot is hidden from the screen — left the board."],[457.5190624999999,"baseline is hidden from the screen — plot left the board."],[457.5190624999999,"shifted is hidden from the screen — plot left the board."],[457.5190624999999,"old_at_sixty is hidden from the screen — plot left the board."],[457.5190624999999,"new_at_sixty is hidden from the screen — plot left the board."],[457.5190624999999,"same_price is hidden from the screen — plot left the board."],[457.5190624999999,"shift_item is hidden from the screen — left the board."],[457.5190624999999,"test_item is hidden from the screen — left the board."]]}]},{"title":"A Bad Harvest Reduces Supply","start":458.56072916666653,"end":551.6409583333332,"objects":{"demand_curve":"a FunctionPlot [blue] labelled \"D\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","equilibrium":"a PlotPoint [yellow] labelled \"E_0\" drawn in plot (target='demand_curve', x=<VariableNumber equilibrium_q = 15.0>)","equilibrium_q":"a VariableNumber (initial_value=20.0)","harvest_loss":"a VariableNumber","heading":"a Heading that says \"Shock One: A Bad Harvest\"","new_result":"a Math [text] that says \"$E_1: thin Q = 15, thin P = 70$\"","new_supply":"a FunctionPlot [red] labelled \"S_1\" drawn in plot (function=<function>, x_range=(0.0, 45.0), y_offset=<VariableNumber harvest_loss = 20.0>)","old_result":"a Math [text] that says \"$E_0: thin Q = 20, thin P = 60$\"","old_supply":"a FunctionPlot [gray] labelled \"S_0\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","plot":"an Axes (x_range=(0.0, 45.0), y_range=(0.0, 135.0), x_ticks_every=5.0)","reason":"a Text [text] that says \"Bad harvest: less can be supplied at every market price.\"","reduced_supply_at_old_price":"a PlotPoint [red] labelled \"Q_s=10\" drawn in plot (target='new_supply', x=10.0)","shortage":"a Brace [yellow] labelled \"upright(\"shortage\")\" drawn in plot (x_start=10.0, x_end=20.0, y=60.0)"},"beats":[{"start":458.56072916666653,"say":"Begin from the familiar equilibrium. Demand is blue, the original supply curve is gray, and their crossing is price sixty with quantity twenty.","live":[],"does":[[458.56072916666653,"heading is shown on the screen, written out."],[459.81472916666655,"plot is shown on the screen, written out."],[461.64872916666656,"demand_curve is shown on the screen, drawn."],[463.72672916666653,"old_supply is shown on the screen, drawn."],[464.93472916666656,"equilibrium is shown on the screen, written out."],[465.83972916666653,"old_result is shown on the screen, written out."]]},{"start":468.41422916666653,"say":"Now imagine a bad harvest. Weather has destroyed part of the crop. At any given market price, farms have fewer sacks available to sell.","live":["old_result","plot","heading","demand_curve","old_supply","equilibrium"],"does":[[469.57472916666654,"reason is shown on the screen, written out."],[475.22872916666654,"reason (the \"less can be supplied\" part) is emphasized."],[477.2727291666665,"reason (the \"less can be supplied\" part) is no longer emphasized."]]},{"start":477.87272916666655,"say":"The product's current market price did not cause the crop loss. Weather is a non-price determinant of supply. Therefore this is not movement along the old gray curve.","live":["reason","old_result","plot","heading","demand_curve","old_supply","equilibrium"],"does":[[487.35772916666656,"old_supply is indicated — a transient flash."]]},{"start":489.35122916666654,"say":"Reveal the new supply curve on top of the old one, then let the entire red relationship shift left and upward. At every price, the quantity sellers can offer is smaller.","live":null,"does":[[490.1987291666665,"new_supply is shown on the screen, written out."],[494.40172916666654,"new_supply is redrawn as the numbers it depends on change."],[494.40172916666654,"harvest_loss ticks to 20.0."]]},{"start":500.1332291666665,"say":"Hold price at its old value of sixty. Buyers still want twenty units, but the damaged harvest supplies only ten. The ten-unit gap is a shortage.","live":["reason","old_result","plot","heading","demand_curve","old_supply","equilibrium","new_supply"],"does":[[504.3597291666665,"equilibrium is indicated — a transient flash."],[506.97172916666653,"reduced_supply_at_old_price is shown on the screen, written out."],[509.65372916666655,"shortage is shown on the screen, written out."]]},{"start":511.10122916666654,"say":"A shortage puts upward pressure on price. As price rises, buyers move up and left along the unchanged blue demand curve, reducing quantity demanded. At the same time sellers move along their new red supply curve.","live":["reason","old_result","plot","heading","demand_curve","old_supply","equilibrium","new_supply","reduced_supply_at_old_price","shortage"],"does":[[514.8167291666665,"equilibrium is redrawn as the numbers it depends on change."],[514.8167291666665,"shortage is hidden from the screen."],[514.8167291666665,"reduced_supply_at_old_price is hidden from the screen."],[514.8167291666665,"equilibrium_q ticks to 15.0."]]},{"start":525.6097291666665,"say":"The adjustment stops at the new crossing. Price is seventy and quantity is fifteen. The bad harvest has raised equilibrium price and reduced equilibrium quantity.","live":["reason","old_result","plot","heading","demand_curve","old_supply","equilibrium","new_supply"],"does":[[525.6097291666665,"new_result is shown on the screen, written out."],[527.2587291666665,"equilibrium: one name gives way to another over the same drawing (label_becomes)."],[529.0227291666665,"new_result (the \"P = 70\" part) is emphasized."],[530.4977291666665,"new_result (the \"P = 70\" part) is no longer emphasized."],[530.4977291666665,"new_result (the \"Q = 15\" part) is emphasized."],[536.6972291666665,"new_result (the \"Q = 15\" part) is no longer emphasized."]]},{"start":537.2972291666665,"say":"Name the two actions separately. Weather shifted the supply curve. The resulting rise in price moved buyers along the demand curve. Calling the whole story movement along supply would erase its actual cause.","live":["reason","old_result","new_result","plot","heading","demand_curve","old_supply","equilibrium","new_supply"],"does":[[540.4667291666665,"new_supply is indicated — a transient flash."],[544.4027291666665,"demand_curve is indicated — a transient flash."],[550.5992916666665,"heading is hidden from the screen — left the board."],[550.5992916666665,"new_result is hidden from the screen — left the board."],[550.5992916666665,"old_result is hidden from the screen — left the board."],[550.5992916666665,"plot is hidden from the screen — left the board."],[550.5992916666665,"demand_curve is hidden from the screen — plot left the board."],[550.5992916666665,"old_supply is hidden from the screen — plot left the board."],[550.5992916666665,"equilibrium is hidden from the screen — plot left the board."],[550.5992916666665,"new_supply is hidden from the screen — plot left the board."],[550.5992916666665,"reason is hidden from the screen — left the board."]]}]},{"title":"A Change in Taste Raises Demand","start":551.6409583333332,"end":651.1734374999999,"objects":{"equilibrium":"a PlotPoint [yellow] labelled \"E_0\" drawn in plot (target='supply_curve', x=<VariableNumber equilibrium_q = 25.0>)","equilibrium_q":"a VariableNumber (initial_value=20.0)","extra_demand_at_old_price":"a PlotPoint [red] labelled \"Q_d=30\" drawn in plot (target='new_demand', x=30.0)","heading":"a Heading that says \"Shock Two: Buyers Want More\"","new_demand":"a FunctionPlot [red] labelled \"D_1\" drawn in plot (function=<function>, x_range=(0.0, 45.0), y_offset=<VariableNumber taste_gain = 20.0>)","new_result":"a Math [text] that says \"$E_1: thin Q = 25, thin P = 70$\"","old_demand":"a FunctionPlot [gray] labelled \"D_0\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","old_result":"a Math [text] that says \"$E_0: thin Q = 20, thin P = 60$\"","plot":"an Axes (x_range=(0.0, 45.0), y_range=(0.0, 125.0), x_ticks_every=5.0)","reason":"a Text [text] that says \"Favorable taste change: buyers want more at every market price.\"","shortage":"a Brace [yellow] labelled \"upright(\"shortage\")\" drawn in plot (x_start=20.0, x_end=30.0, y=60.0)","supply_curve":"a FunctionPlot [green] labelled \"S\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","taste_gain":"a VariableNumber"},"beats":[{"start":551.6409583333332,"say":"Reset the market to the same starting equilibrium. Quantity is twenty and price is sixty. The old demand curve is gray, and supply is green.","live":[],"does":[[551.6409583333332,"heading is shown on the screen, written out."],[552.2099583333331,"plot is shown on the screen, written out."],[553.5569583333332,"equilibrium is shown on the screen, written out."],[556.5169583333332,"plot moves to a new place on the board."],[556.5169583333332,"old_result is shown on the screen, written out."],[559.0249583333332,"old_demand is shown on the screen, drawn."],[560.4179583333332,"supply_curve is shown on the screen, drawn."]]},{"start":561.8424583333332,"say":"Now suppose the product becomes fashionable. Perhaps a popular recipe makes these sacks of flour especially desirable. Buyers want more at each possible price.","live":["old_result","plot","heading","old_demand","supply_curve","equilibrium"],"does":[[563.8279583333332,"reason is shown on the screen, written out."]]},{"start":573.1294583333332,"say":"Taste is not the product's own price. Because a non-price determinant of demand changed, the entire demand relationship must shift. This example uses a favorable taste change, so demand increases.","live":["reason","old_result","plot","heading","old_demand","supply_curve","equilibrium"],"does":[[576.2239583333331,"reason (the \"every market price\" part) is emphasized."],[586.0229583333331,"reason (the \"every market price\" part) is no longer emphasized."]]},{"start":586.6229583333331,"say":"Place the new red demand curve over the old one, then shift it right and upward. Every point moves because buyer willingness has changed throughout the market.","live":null,"does":[[587.6449583333332,"new_demand is shown on the screen, written out."],[589.8619583333332,"new_demand is redrawn as the numbers it depends on change."],[589.8619583333332,"taste_gain ticks to 20.0."]]},{"start":596.8014583333331,"say":"At the old price sixty, sellers still offer twenty units, but buyers now want thirty. That ten-unit shortage shows why the old price cannot remain the equilibrium price.","live":["reason","old_result","plot","heading","old_demand","supply_curve","equilibrium","new_demand"],"does":[[599.8309583333332,"equilibrium is indicated — a transient flash."],[602.0369583333331,"extra_demand_at_old_price is shown on the screen, written out."],[604.0569583333332,"shortage is shown on the screen, written out."]]},{"start":609.1734583333332,"say":"Price rises. The supply curve itself has not shifted, so sellers respond by moving up and right along that same green curve. The new equilibrium reaches quantity twenty-five and price seventy.","live":["reason","old_result","plot","heading","old_demand","supply_curve","equilibrium","new_demand","extra_demand_at_old_price","shortage"],"does":[[610.1489583333332,"equilibrium is redrawn as the numbers it depends on change."],[610.1489583333332,"shortage is hidden from the screen."],[610.1489583333332,"extra_demand_at_old_price is hidden from the screen."],[610.1489583333332,"equilibrium_q ticks to 25.0."]]},{"start":623.5779583333332,"say":"At the new crossing, both equilibrium price and equilibrium quantity are higher. The favorable taste change increased demand, and the resulting higher price increased quantity supplied.","live":["reason","old_result","plot","heading","old_demand","supply_curve","equilibrium","new_demand"],"does":[[623.5779583333332,"new_result is shown on the screen, written out."],[624.2629583333331,"equilibrium: one name gives way to another over the same drawing (label_becomes)."],[628.0709583333331,"new_result is indicated — a transient flash."]]},{"start":635.7069583333332,"say":"Keep the grammar exact. Taste shifted demand. Price then caused movement along unchanged supply. If the product had become less popular, demand would instead shift left, reversing these directional pressures.","live":["reason","old_result","new_result","plot","heading","old_demand","supply_curve","equilibrium","new_demand"],"does":[[638.3189583333332,"new_demand is indicated — a transient flash."],[641.1519583333331,"supply_curve is indicated — a transient flash."],[650.1317708333331,"heading is hidden from the screen — left the board."],[650.1317708333331,"new_result is hidden from the screen — left the board."],[650.1317708333331,"old_result is hidden from the screen — left the board."],[650.1317708333331,"plot is hidden from the screen — left the board."],[650.1317708333331,"old_demand is hidden from the screen — plot left the board."],[650.1317708333331,"supply_curve is hidden from the screen — plot left the board."],[650.1317708333331,"equilibrium is hidden from the screen — plot left the board."],[650.1317708333331,"new_demand is hidden from the screen — plot left the board."],[650.1317708333331,"reason is hidden from the screen — left the board."]]}]},{"title":"A New Competitor Enters","start":651.1734374999999,"end":854.8218333333332,"objects":{"demand_curve":"a FunctionPlot [blue] labelled \"D\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","diagnostic":"a Text [text] that says \"First identify the non-price event and shift its curve. Then use the shortage or surplus to find the price change and movement along the unchanged curve.\"","entry_gain":"a VariableNumber","equilibrium":"a PlotPoint [yellow] labelled \"E_0\" drawn in plot (target='demand_curve', x=<VariableNumber equilibrium_q = 25.0>)","equilibrium_q":"a VariableNumber (initial_value=20.0)","extra_supply_at_old_price":"a PlotPoint [red] labelled \"Q_s=30\" drawn in plot (target='new_supply', x=30.0)","heading":"a Heading that says \"Shock Three: A New Competitor\"","new_result":"a Math [text] that says \"$E_1: thin Q = 25, thin P = 50$\"","new_supply":"a FunctionPlot [red] labelled \"S_1\" drawn in plot (function=<function>, x_range=(0.0, 45.0), y_offset=<VariableNumber entry_gain = -20.0>)","old_result":"a Math [text] that says \"$E_0: thin Q = 20, thin P = 60$\"","old_supply":"a FunctionPlot [gray] labelled \"S_0\" drawn in plot (function=<function>, x_range=(0.0, 45.0))","plot":"an Axes (x_range=(0.0, 45.0), y_range=(0.0, 125.0), x_ticks_every=5.0)","reason":"a Text [text] that says \"New competitor: more can be supplied at every market price.\"","summary":"a Table [text] that says \"Event Curve shift Price Quantity Bad harvest Supply left Up Down Favorable taste Demand right Up Up New competitor Supply right Down Up\" (rows=(('Event', 'Curve shift', 'Price', 'Quantity'), ('Bad harvest',…, header=True)","summary_heading":"a Heading that says \"Three Shifts, One Method\"","surplus":"a Brace [yellow] labelled \"upright(\"surplus\")\" drawn in plot (x_start=20.0, x_end=30.0, y=60.0)"},"beats":[{"start":651.1734374999999,"say":"Reset once more to the original equilibrium: price sixty and quantity twenty. Demand is blue, original supply is gray, and the yellow point is their crossing.","live":[],"does":[[651.1734374999999,"heading is shown on the screen, written out."],[652.8684374999999,"plot is shown on the screen, written out."],[654.4704374999999,"plot moves to a new place on the board."],[654.4704374999999,"old_result is shown on the screen, written out."],[657.3844374999999,"demand_curve is shown on the screen, drawn."],[659.0454374999998,"old_supply is shown on the screen, drawn."],[661.1004374999999,"equilibrium is shown on the screen, written out."]]},{"start":662.7099374999999,"say":"Now a new competitor enters the market. There is another seller with workers, equipment, and stock ready to serve buyers. At every given price, total market production can be larger.","live":["old_result","plot","heading","demand_curve","old_supply","equilibrium"],"does":[[663.7544374999999,"reason is shown on the screen, written out."],[674.0764374999999,"reason (the \"more can be supplied\" part) is indicated — a transient flash."]]},{"start":675.5939374999998,"say":"Entry is not a change in the product's market price. It changes the number of sellers, a non-price determinant of supply. We therefore shift the entire supply curve.","live":["reason","old_result","plot","heading","demand_curve","old_supply","equilibrium"],"does":[[682.4084374999999,"old_supply is indicated — a transient flash."]]},{"start":687.1769374999999,"say":"Reveal the new red supply curve, then shift it right and downward. At a fixed price, the combined sellers now offer a greater quantity.","live":null,"does":[[688.3144374999998,"new_supply is shown on the screen, written out."],[689.7194374999999,"entry_gain ticks to -20.0."],[689.8144374999998,"new_supply is redrawn as the numbers it depends on change."]]},{"start":696.4954374999999,"say":"Hold price at sixty. Buyers still want twenty units, but sellers now offer thirty. The extra ten units form a surplus, so the old price is too high to clear the market.","live":["reason","old_result","plot","heading","demand_curve","old_supply","equilibrium","new_supply"],"does":[[699.8394374999999,"equilibrium is indicated — a transient flash."],[701.8594374999999,"extra_supply_at_old_price is shown on the screen, written out."],[704.7384374999999,"surplus is shown on the screen, written out."]]},{"start":708.8914374999998,"say":"Competition among sellers puts downward pressure on price. As price falls, buyers move down and right along the unchanged blue demand curve, while sellers move along their new red supply curve.","live":["reason","old_result","plot","heading","demand_curve","old_supply","equilibrium","new_supply","extra_supply_at_old_price","surplus"],"does":[[713.6284374999999,"equilibrium is redrawn as the numbers it depends on change."],[713.6284374999999,"surplus is hidden from the screen."],[713.6284374999999,"extra_supply_at_old_price is hidden from the screen."],[713.6284374999999,"equilibrium_q ticks to 25.0."]]},{"start":721.2289374999999,"say":"The new crossing has price fifty and quantity twenty-five. Entry lowers the equilibrium price and raises the equilibrium quantity.","live":["reason","old_result","plot","heading","demand_curve","old_supply","equilibrium","new_supply"],"does":[[721.2289374999999,"new_result is shown on the screen, written out."],[721.6354374999999,"equilibrium: one name gives way to another over the same drawing (label_becomes)."],[722.7724374999999,"new_result (the \"P = 50\" part) is emphasized."],[723.9684374999998,"new_result (the \"P = 50\" part) is no longer emphasized."],[723.9684374999998,"new_result (the \"Q = 25\" part) is emphasized."],[729.4829374999999,"new_result (the \"Q = 25\" part) is no longer emphasized."]]},{"start":730.0829374999998,"say":"Again, two actions belong to one story. The competitor shifted supply. The resulting fall in price caused movement along demand. The yellow point moved, but that does not make every part of the story movement along a curve.","live":["reason","old_result","new_result","plot","heading","demand_curve","old_supply","equilibrium","new_supply"],"does":[[734.4364374999999,"new_supply is indicated — a transient flash."],[738.2334374999998,"demand_curve is indicated — a transient flash."],[744.5259374999998,"heading is hidden from the screen — left the board."],[744.5259374999998,"new_result is hidden from the screen — left the board."],[744.5259374999998,"old_result is hidden from the screen — left the board."],[744.5259374999998,"plot is hidden from the screen — left the board."],[744.5259374999998,"demand_curve is hidden from the screen — plot left the board."],[744.5259374999998,"old_supply is hidden from the screen — plot left the board."],[744.5259374999998,"equilibrium is hidden from the screen — plot left the board."],[744.5259374999998,"new_supply is hidden from the screen — plot left the board."],[744.5259374999998,"reason is hidden from the screen — left the board."]]},{"start":745.7259374999999,"say":"Put the three experiments together. A bad harvest reduced supply, so supply shifted left. Price rose and quantity fell.","live":[],"does":[[745.7259374999999,"summary_heading is shown on the screen, written out."],[747.2824374999999,"summary is shown on the screen, written out."],[748.7104374999999,"summary is shown on the screen, written out."],[751.7634374999999,"summary (the \"row=2\" part) is emphasized."],[755.1999374999999,"summary (the \"row=2\" part) is no longer emphasized."]]},{"start":755.7999374999998,"say":"A favorable change in taste increased demand, so demand shifted right. Both equilibrium price and equilibrium quantity rose.","live":["summary_heading"],"does":[[757.3554374999999,"summary is shown on the screen, written out."],[759.9794374999999,"summary (the \"row=3\" part) is emphasized."],[764.7629374999999,"summary (the \"row=3\" part) is no longer emphasized."]]},{"start":765.3629374999998,"say":"A new competitor increased supply, so supply shifted right. Equilibrium price fell, while equilibrium quantity rose.","live":null,"does":[[766.0364374999999,"summary is shown on the screen, written out."],[768.6834374999999,"summary (the \"row=4\" part) is emphasized."],[773.6524374999999,"summary (the \"row=4\" part) is no longer emphasized."]]},{"start":774.2524374999998,"say":"Notice that quantity rose in the last two cases, but for different reasons. Taste shifted demand and raised price. Entry shifted supply and lowered price. Watching quantity alone cannot identify which curve changed.","live":null,"does":[[775.0884374999998,"summary (the \"column=4\" part) is emphasized."],[780.9274374999999,"summary (the \"column=4\" part) is no longer emphasized."]]},{"start":789.5039374999999,"say":"Price also rose in two cases. After the harvest, higher price moved buyers along demand. After the taste change, higher price moved sellers along supply. The initiating shifts were different even though the price direction matched.","live":null,"does":[[789.8524374999998,"summary (the \"column=3\" part) is emphasized."],[804.8749374999999,"summary (the \"column=3\" part) is no longer emphasized."]]},{"start":805.4749374999999,"say":"So use this method. First identify the event that happened before price adjusted. Decide whether it changes buyer choices or seller choices at every price, and shift that curve.","live":null,"does":[[806.6124374999999,"diagnostic is shown on the screen, written out."],[808.4124374999999,"diagnostic (the \"identify the non-price event\" part) is emphasized."],[815.4134374999999,"diagnostic (the \"shift its curve\" part) is emphasized."],[816.6204374999999,"diagnostic (the \"identify the non-price event\" part) is no longer emphasized."],[816.6204374999999,"diagnostic (the \"shift its curve\" part) is no longer emphasized."]]},{"start":817.2204374999999,"say":"Second, inspect the old price. The shifted curve creates a shortage or a surplus. That imbalance tells you whether price rises or falls.","live":["diagnostic","summary_heading"],"does":[[821.9344374999998,"diagnostic (the \"shortage or surplus\" part) is emphasized."],[827.4139374999999,"diagnostic (the \"shortage or surplus\" part) is no longer emphasized."]]},{"start":828.0139374999999,"say":"Third, follow the price adjustment to the new crossing. Price change moves the market along the curve that did not shift. The new crossing gives the new equilibrium price and quantity.","live":null,"does":[[833.1104374999999,"diagnostic (the \"movement along the unchanged curve\" part) is emphasized."],[839.9254374999998,"diagnostic (the \"movement along the unchanged curve\" part) is no longer emphasized."]]},{"start":840.5254374999998,"say":"A movement along a curve answers what happens when price changes within one fixed relationship. A shift answers what happens when the relationship itself changes. Market adjustment often contains both, in that order.","live":null,"does":[[852.1594374999999,"diagnostic is indicated — a transient flash."],[853.7801666666666,"diagnostic is hidden from the screen — left the board."],[853.7801666666666,"summary is hidden from the screen — left the board."],[853.7801666666666,"summary_heading is hidden from the screen — left the board."]]}]}]},"durationSeconds":855,"chapters":[{"title":"What a Demand Curve Claims","startSeconds":0,"narration":"Suppose we are studying one ordinary market, perhaps sacks of flour sold during one week. Two measurements matter. Price tells us how much one sack costs, and quantity tells us how many sacks are bought and sold. Put quantity across the bottom and price up the side. A point in this picture is one possible pair, one quantity together with one price. Our first question concerns buyers. At each possible price, how many sacks would they choose to purchase? A demand curve collects all those answers. This blue line is the demand curve. It slopes downward because, with other influences held fixed, a lower price usually makes buying attractive to more people and makes some existing buyers willing to buy more. That final qualification matters. We are comparing prices while income, preferences, the number of buyers, and other market conditions remain the same. The curve is a controlled comparison, not a claim that nothing else in the world can ever change. For a concrete example, let the demand rule be price equals one hundred minus two times quantity. At quantity twenty, the corresponding price is sixty. Read that point in the direction buyers actually face the choice. If the market price is sixty, buyers choose quantity twenty. The graph and the equation are saying exactly the same thing. Now let the price fall from sixty to forty. We do not draw a new demand curve. We travel down and to the right on the blue curve, reaching quantity thirty. This is called an increase in quantity demanded. It is movement along the existing demand curve, caused by the change in the product's own price. The relationship represented by the blue curve has not changed. Reverse the experiment. Let price rise to eighty. Buyers move up and left on that same curve, and quantity demanded falls to ten. Again, the curve itself did not move. A different price selected a different point from the same list of buyer choices. Price change means movement along demand. Return to price sixty and quantity twenty. Keep that point in mind, because later we will change something other than price. When that happens, one blue curve will no longer contain the buyer choices we need."},{"title":"Supply Meets Demand","startSeconds":148.8745208333333,"narration":"Buyers are only half the market. Sellers also make a choice. At every possible price, how many units are farms, shops, or factories willing to produce and offer for sale? The green supply curve collects those seller choices. It usually slopes upward. A higher price can cover the cost of more difficult units and can make extra production worthwhile. Once again, other conditions are held fixed. Technology, input costs, weather, taxes, and the number of sellers are not changing while we trace this one curve. Use the supply rule price equals twenty plus two times quantity. At price forty, sellers choose to offer ten units. Raise the price to eighty. Sellers move up and right on the same green curve, offering thirty units. This is an increase in quantity supplied, not a shift of supply. A price change therefore produces movement along supply, just as a price change produced movement along demand. The slopes differ because buyers and sellers respond to price in opposite directions. Now place buyer plans and seller plans in the same market. The blue demand curve slopes down. The green supply curve slopes up. Their crossing asks whether the two groups can agree. First try a price of eighty. At that price buyers want ten units, while sellers offer thirty. Sellers are offering twenty more units than buyers want. That excess is a surplus. Unsold goods give sellers a reason to cut price. As price falls, quantity supplied moves down its green curve and quantity demanded moves down and right on its blue curve. Now try a price of forty. Sellers offer ten units, but buyers want thirty. Buyers want twenty more units than sellers offer. That gap is a shortage. Competing buyers and sellers who see goods selling quickly have a reason to raise price. Rising price reduces quantity demanded and increases quantity supplied. The pressure to change price stops at the crossing. At price sixty, buyers choose twenty units and sellers offer twenty units. No planned purchases or sales are left unmatched. Algebra reaches the same point. Set the demand price equal to the supply price. Solving gives equilibrium quantity twenty and equilibrium price sixty. Equilibrium does not mean that everyone loves the outcome or that the market can never change. It means that, under the current demand and supply conditions, buyer plans and seller plans agree at one price and quantity."},{"title":"Movement Along or Shift of the Curve?","startSeconds":321.64864583333326,"narration":"We now need the distinction that prevents most early mistakes in supply and demand. Two pictures can contain a moving point, yet describe two completely different economic events. First, movement along a curve. Begin at price sixty and quantity twenty. If this product's own price falls to forty, quantity demanded rises to thirty. The blue curve did not change its location, slope, or meaning. We simply selected another point from the same relationship. The cause was a change in the price shown on the vertical axis. Return to the original point. This time hold the displayed price at sixty. Imagine that the product becomes fashionable, so buyers want more of it even though its price has not changed. Fashion is not the price of the product. It is a non-price influence on demand. The old blue relationship is no longer enough, because at every price buyers now choose a larger quantity. Watch the entire red demand curve shift to the right. In this inverse price picture the same change also looks upward. The important fact is that every point of the relationship moves together. At the unchanged price sixty, the old curve says quantity twenty and the new curve says quantity thirty. That comparison at one fixed price proves that this is a shift, not movement caused by price. The language is precise. A price change causes a change in quantity demanded, represented by movement along one demand curve. A change in taste causes a change in demand, represented by a shift of the curve. Use the diagnostic every time. Did the product's own price change while the relationship stayed fixed? Move along. Did income, taste, population, expectations, production conditions, or the number of sellers change? Shift the appropriate curve. A single market story can contain both actions. A non-price event shifts one curve first. The resulting change in equilibrium price then produces movement along the other, unchanged curve. We will now repeat that order three times."},{"title":"A Bad Harvest Reduces Supply","startSeconds":458.56072916666653,"narration":"Begin from the familiar equilibrium. Demand is blue, the original supply curve is gray, and their crossing is price sixty with quantity twenty. Now imagine a bad harvest. Weather has destroyed part of the crop. At any given market price, farms have fewer sacks available to sell. The product's current market price did not cause the crop loss. Weather is a non-price determinant of supply. Therefore this is not movement along the old gray curve. Reveal the new supply curve on top of the old one, then let the entire red relationship shift left and upward. At every price, the quantity sellers can offer is smaller. Hold price at its old value of sixty. Buyers still want twenty units, but the damaged harvest supplies only ten. The ten-unit gap is a shortage. A shortage puts upward pressure on price. As price rises, buyers move up and left along the unchanged blue demand curve, reducing quantity demanded. At the same time sellers move along their new red supply curve. The adjustment stops at the new crossing. Price is seventy and quantity is fifteen. The bad harvest has raised equilibrium price and reduced equilibrium quantity. Name the two actions separately. Weather shifted the supply curve. The resulting rise in price moved buyers along the demand curve. Calling the whole story movement along supply would erase its actual cause."},{"title":"A Change in Taste Raises Demand","startSeconds":551.6409583333332,"narration":"Reset the market to the same starting equilibrium. Quantity is twenty and price is sixty. The old demand curve is gray, and supply is green. Now suppose the product becomes fashionable. Perhaps a popular recipe makes these sacks of flour especially desirable. Buyers want more at each possible price. Taste is not the product's own price. Because a non-price determinant of demand changed, the entire demand relationship must shift. This example uses a favorable taste change, so demand increases. Place the new red demand curve over the old one, then shift it right and upward. Every point moves because buyer willingness has changed throughout the market. At the old price sixty, sellers still offer twenty units, but buyers now want thirty. That ten-unit shortage shows why the old price cannot remain the equilibrium price. Price rises. The supply curve itself has not shifted, so sellers respond by moving up and right along that same green curve. The new equilibrium reaches quantity twenty-five and price seventy. At the new crossing, both equilibrium price and equilibrium quantity are higher. The favorable taste change increased demand, and the resulting higher price increased quantity supplied. Keep the grammar exact. Taste shifted demand. Price then caused movement along unchanged supply. If the product had become less popular, demand would instead shift left, reversing these directional pressures."},{"title":"A New Competitor Enters","startSeconds":651.1734374999999,"narration":"Reset once more to the original equilibrium: price sixty and quantity twenty. Demand is blue, original supply is gray, and the yellow point is their crossing. Now a new competitor enters the market. There is another seller with workers, equipment, and stock ready to serve buyers. At every given price, total market production can be larger. Entry is not a change in the product's market price. It changes the number of sellers, a non-price determinant of supply. We therefore shift the entire supply curve. Reveal the new red supply curve, then shift it right and downward. At a fixed price, the combined sellers now offer a greater quantity. Hold price at sixty. Buyers still want twenty units, but sellers now offer thirty. The extra ten units form a surplus, so the old price is too high to clear the market. Competition among sellers puts downward pressure on price. As price falls, buyers move down and right along the unchanged blue demand curve, while sellers move along their new red supply curve. The new crossing has price fifty and quantity twenty-five. Entry lowers the equilibrium price and raises the equilibrium quantity. Again, two actions belong to one story. The competitor shifted supply. The resulting fall in price caused movement along demand. The yellow point moved, but that does not make every part of the story movement along a curve. Put the three experiments together. A bad harvest reduced supply, so supply shifted left. Price rose and quantity fell. A favorable change in taste increased demand, so demand shifted right. Both equilibrium price and equilibrium quantity rose. A new competitor increased supply, so supply shifted right. Equilibrium price fell, while equilibrium quantity rose. Notice that quantity rose in the last two cases, but for different reasons. Taste shifted demand and raised price. Entry shifted supply and lowered price. Watching quantity alone cannot identify which curve changed. Price also rose in two cases. After the harvest, higher price moved buyers along demand. After the taste change, higher price moved sellers along supply. The initiating shifts were different even though the price direction matched. So use this method. First identify the event that happened before price adjusted. Decide whether it changes buyer choices or seller choices at every price, and shift that curve. Second, inspect the old price. The shifted curve creates a shortage or a surplus. That imbalance tells you whether price rises or falls. Third, follow the price adjustment to the new crossing. Price change moves the market along the curve that did not shift. The new crossing gives the new equilibrium price and quantity. A movement along a curve answers what happens when price changes within one fixed relationship. A shift answers what happens when the relationship itself changes. Market adjustment often contains both, in that order."}]}}