Page 12 - E-NOTE 120-converted

INCREASE IN SUPPLY

• SHIFT TO THE RIGHT

• DUE TO INCREASE NO. OF SELLER

• MARKET SURPLUS
• EQUIL P DECREASE Q INCREASE

DECREASE IN SUPPLY

• SHIFT TO THE LEFT

• DUE TO INCREASE IN PRICE OF INPUT
• MARKET SHORTAGE

• EQUIL P INCREASE Q DECREASE

BOTH DEMAND & SUPPLY CHANGES IN SIMILAR PROPORTION

BOTH DEMAND & SUPPLY CHANGES IN DIFFERENT PROPORTION

PRICE CEILING

• TO PROTECT THE WELFARE OF CONSUMER
• GOV THINK PRICE TOO HIGH; FESTIVAL SEASON

• ADV: THE PRICE IS AFFORDABLE, CONTROL INFLATION
• DISADV: CREATE SHORTAGE OF PRODUCT; ILLEGAL OR BLACK MARKET