Draw the graph · Micro · Supply and demand
A pandemic hits restaurants
Drag a curve sideways, or use its arrows. A curve you do not move is a curve you are saying stays put. Make each shift clear enough that a reader could see it.
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Demand shifts left. Supply shifts left.
Two events, two sides. Fewer people willing to eat out means less wanted at every price, so demand shifts left. Higher operating costs mean less offered at every price, so supply shifts left. Both shifts cut quantity. The demand shift lowers price and the supply shift raises it, so the net effect on price depends on which shift is bigger.
Quantity falls for certain, while price may rise or fall depending on which shift is larger.
Common mistake. A frequent slip is to shift only demand and conclude that prices fall. The cost increase pushes the other way. Quantity is certain to fall, price is not.
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Lesson: Double Shifts