Bringing Supply and Demand Together

If the decrease in demand is greater than the increase in supply, the equilibrium quantity will decrease.

• If the decrease in demand is greater than the increase in supply, the equilibrium quantity will decrease.
• If the increase in supply is greater than the decrease in demand, the equilibrium quantity will increase.

• The Market for Aspen Rentals

• Shifts in Supply and Demand

Notice that the seasonal increases in demand led to a shortage at the original (out of season) price.

• Notice that the seasonal increases in demand led to a shortage at the original (out of season) price.
• When a shortage exists the price will rise until the new equilibrium is reached. In this case, at the intersection of the in-season demand curve and the supply curve.