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Effects of Market Shocks on Price and Quantity

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Please help with the following problem.

For each of the following changes, show/describe the effect on the DEMAND CURVE and state what will happen to market equilibrium price and quantity (in the short run).

a. Consumers expect that the price of the good will be higher in the future.
b. The price of a substitute good rises.
c. Consumer incomes fall, and the good is normal.
d. Consumer incomes fall, and the good is inferior.
e. A medical report is published showing that this good is hazardous to your health.
f. The price of the good rises.

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Solution Summary

This solution explains the effects on equilibrium price and quantity of six shocks to a given market.

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Problem: For each of the following changes, show/describe the effect on the DEMAND CURVE and state what will happen to market equilibrium price and quantity (in the short run).

a. Consumers expect that the price of the good will be higher in the future.

Consumers respond by buying more now, before the price rises. The Demand curve shifts to the right. ...

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