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Chapter 6, Problem 7
Look at Figures $6.4,6.5,6.6,$ and $6.7$ again. What happens to surplus and shortage as equilibrium price changes in each graph? What general conclusions can you draw from this information?
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Official textbook answer
Video by Tommy Nguyen
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Hey there, everyone. Now I’m going to talk about surplus and shortage when the equilibrium moves. So let’s assume that the demand for a product increases. This means that the curve will shift right, so it’s not a sore point. Immune graph really quick. So here’s our graph. And because our domain increase, the demand curve, which is the red line, will shift right as well. And as you can see, even when demand shifted right, we are still in an equilibrium. And this means that the quantity supplies equals quantity, demand…