Answer to Question #229802 in Microeconomics for Tee Tee

Question

Use diagrams to illustrate the impact of demand curve and the equilibrium price and quantity of Sasko bread

Answer 1

The illustration shows that with more people demanding for the bread, the price will move from equilibrium upwards, while the quantity will reduce, especially if supply is constant unless Sasko or any other supplier produces more and pumps into the market.

Initially, the bread market was in equilibrium at price P0 and quantity Q0. If demand for this bread increases, the demand curve shifts to the right from D0 to D1. The quantity demanded associated with the price P0 is now QD