Purchase Solution

How supply shocks affect supply and demand curves.

Not what you're looking for?

Ask Custom Question

Consider the following event: Due to severe damage, a gas pipeline supplying gas to Arizona was shut down for a few weeks in the summer of 2003. Gas became scarce in Arizona, and prices rose, causing consumers to panic.

Address the following questions in your analysis of this event's affect on the market equilibrium:

1. Was there a shift in the supply curve, demand curve or both?

2. Did the shift happen to the left or to the right?

3. describe the direction of the shift in the supply curve, demand curve, or both.

Purchase this Solution

Solution Summary

How supply shocks affect supply and demand curves.

Solution Preview

Supply shocks generally have a twofold effect on the market. Firstly, the supply is seriously reduced, moving the supply curve to the left, which increases ...

Purchase this Solution


Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.