Microeconomics › Section C · Demand and supply › Topic C.3

Changes in equilibrium: the four-step process

Any economic event - a harvest failure, a fashion trend, a new tax - can be pushed through the same four questions: draw the market first, name the curve, name the direction, compare the equilibria. The four-step process turns the demand-supply model from a picture into a working tool.

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One process for every event
Step 1: draw the market before
Step 2: which curve?
Step 3: which direction?
Step 4: compare the equilibria
Worked example: a bumper harvest
Worked example: a demand trend
Worked example: both curves at once
Markets adjust, and quickly
Common mistakes to avoid
Key takeaways

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