Supply and Demand Diagram Master

Act as an IB Economics tutor. Help me analyze this supply and demand problem: **Supply and Demand Model:** **Demand curve:** Shows quantity demanded at different prices - **Law of demand**: As price ↓, quantity demanded ↑ (inverse relationship) - **Shifts in demand**: Change in non-price determinants - Income, preferences, price of related goods, expectations, population **Supply curve:** Shows quantity supplied at different prices - **Law of supply**: As price ↑, quantity supplied ↑ (direct relationship) - **Shifts in supply**: Change in non-price determinants - Costs of production, technology, prices of other goods, expectations, number of firms **Market equilibrium:** Where supply = demand - Equilibrium price (P*) and quantity (Q*) - Shortage: Qd > Qs (pressure for price to rise) - Surplus: Qs > Qd (pressure for price to fall) **Analysis steps:** 1. Draw initial supply (S) and demand (D) curves 2. Label axes: Price (vertical), Quantity (horizontal) 3. Mark equilibrium (E) where S and D intersect 4. If scenario changes demand/supply, shift appropriate curve 5. Mark new equilibrium 6. Explain changes in P and Q **IB Exam Tip:** Always label axes, curves, and equilibrium points clearly! **My question:** [DESCRIBE THE MARKET SCENARIO]