29
Price (2000 dollars per barrel) Year 0 10 20 30 40 50 60 70
Pric
e(2
000
dol
lars
per
bar
rel)
Year19
6919
7119
7319
7519
7719
7919
8119
8319
8519
8719
8919
9119
9319
9519
9719
9920
0120
0320
050
10
20
30
40
50
60
70
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
0
2
4
6
8
10
12
14
16
18
20
Qua
ntity
(mill
ions
of
bar
rels
per
day
)
Year
A Supply Schedule for Apartments Price ($1000s) 100 99 98 97 96 95 94 93 92 91 90 Quantity of Apartments Supplied 10 9 8 7 6 5 4 3 2 1 0
A Demand Schedule for Apartments Price ($1000s) 100 99 98 97 96 95 94 93 92 91 90 Quantity of Apartments Demanded 0 1 2 3 4 5 6 7 8 9 10
Combined Supply and Demand Schedules for Apartments Price ($1000s) 100 99 98 97 96 95 94 93 92 91 90 Quantity of Apartments Supplied 10 9 8 7 6 5 4 3 2 1 0 Quantity of Apartments Demanded 0 1 2 3 4 5 6 7 8 9 10
Supply and Demand Schedules After an Increase in Supply (Only)
Price ($1000s) 100 99 98 97 96 95 94 93 92 91 90 Quantity of Apartments Supplied 12 11 10 9 8 7 6 5 4 3 2 Quantity of Apartments Demanded 0 1 2 3 4 5 6 7 8 9 10
Supply and Demand Schedules After an Increase in Demand (Only) Price ($1000s) 100 99 98 97 96 95 94 93 92 91 90 Quantity of Apartments Supplied 10 9 8 7 6 5 4 3 2 1 0 Quantity of Apartments Demanded 4 5 6 7 8 9 10 11 12 13 14
Summary of the Effects of Shifts in Supply and Demand Effect on
Equilibrium Price
Effect on Equilibrium
Quantity
Increase in Supply
fall rise
Decrease in Supply
rise fall
Increase in Demand
rise rise
Decrease in Demand
fall fall
Distinguishing Three Forms of Insufficiency in Supply Considered a
Fundamental Characteristic of
the World?
Always Disappears at
Market Equilibrium?
Related to Basic Human Needs?
Scarcity Yes No No Shortage No Yes No Inadequacy No No Yes
Price
Quantity
Year
Pric
e (2
000
dolla
rs p
er b
arre
l)
Qua
ntity
(m
illio
ns o
f ba
rrel
s pe
r da
y)
2006
1986
1981
19781973
19741979
1996
1995 2001
Pric
e (2
000
dolla
rs p
er b
arre
l)
Quantity (millions of barrels per day)
1969 1995
1979
1981
2006
1996
1986
197820041985
1980
Per
Cap
ital C
onsu
mpt
ion
of O
il (g
allo
ns p
er d
ay)
Price 17 16 15 14 13 12 11 Quantity Supplied 9 7 5 3 1 -- -- Quantity Demanded 3 4 5 6 7 8 9
Price
Quantity
S1
D
S2
Q1Q2
P2
P1
